A National Party-led government would deliver a pre-Christmas mini-budget to kick off 6.5% spending cuts that it would require from back-office or nonessential programmes, National finance spokesperson Nicola Willis says.

She made the pledge at the publication of National’s updated fiscal plan to deliver a $3.4 billion improvement in government debt levels and slightly larger fiscal surpluses than the Treasury forecast in last week’s pre-election economic and fiscal update.

National’s much-awaited “fiscal plan” is its last substantive policy announcement before early voting starts on Monday, ahead of Election Day on October 14.

The plan contains no changes to its previously announced “self-funding” package of income tax relief, including no change to the $764 million a year it expects to raise by 2027/28 from a 15% tax on the purchase of homes worth more than $2m by foreign purchasers.

National claims it will cut spending on the bureaucracy by $594m annually for the next four years to produce $2.376bn of savings over the period in a package of wider savings and a raid on funds generated by the Emissions Trading Scheme (ETS).

A further four-year saving of $2.119bn – a bit over half a billion dollars a year – is saved by “closing Labour programmes”. Lower spending is also achieved by indexing benefits to inflation rather than wages.

The total over four years of savings and revenue redirection is $8.384bn.

The half-billion dollars applied to tax relief from the ETS funds replaces the $500m that Labour had allocated in the pre-election economic and fiscal update (Prefu) to the National Land Transport Fund (NLTF).

National said it would scrap that but still find the same sum for roading investment by taking $2.1bn from operating allowances over the next four years and $1.6bn from the multi-year capital account.

National’s new spending allowances in the next four years’ budgets are shaved back to produce $3.3bn less new government debt by 2027/28 than forecast in the Prefu.

However, National allows itself $9.9bn of unallocated spending over the four-year period, giving “significant buffers” to allow a National-led government to “respond to cost pressures and changing circumstances”.  

The plan also envisages using private capital to pursue additional transport spending “with new cost recovery tools, like tolls and value capture levies, being introduced to cover the cost of these projects”.

“National will issue a new government policy statement on land transport, in line with the funding set out in this fiscal plan,” the document says. “Priority will be given to state highway improvements, road maintenance including fixing potholes, and the roll-out of a nationwide EV charging network.

“National intends to spend less on other areas such as coastal shipping, inter-regional public transport and walking and cycling.”

Willis said that net government debt had blown out from $5bn to a forecast $104bn since Labour took office in 2017 and that government spending had risen 80%.

“The country cannot afford another three years of it,” National’s leader, Christopher Luxon, said, announcing the plan at the offices of one of its campaign advisers, Topham Guerin.

National’s own forecasts show that net crown debt still peaks at almost that level – at $102.8bn in 2025/26 – but drops away faster in the following two years to be at $97.6bn in 2027/28, compared with $21.1bn in the Prefu.

That helps produce forecast budget surpluses of $2.9bn in 2026/27 and $1.8bn in 2027/28, compared with Prefu forecasts of $2.1bn and $400m, respectively.

In terms of new spending, National has allocated a $718m contingency “to cover a potential 1400 increase in the prison population over the next four years” as a result of tougher sentencing policies.

“Government spending over the forecast period is expected to decline from 33.5% of GDP to 31% of GDP by 2027/28,” National said.

New Zealand’s 2023 research “commercialisation icon” found his niche after helping deal with the United Kingdom’s foot and mouth disease outbreak more than 20 years ago.

A veterinarian by profession, Duncan Mackintosh won the supreme prize at the annual KiwiNet Research Commercialisation Awards on September 28 for his role as New Zealand senior investment manager with Brandon Capital Partners.

The Melbourne-headquartered life sciences venture capital company started in 2007 and has now grown to A$800 million ($858.3m) in funds under management.

KiwiNet’s Commercialisation Icon Award is made to the person judged to have made an outstanding impact in advancing the commercialisation of publicly funded research in NZ.

KiwiNet is a consortium bringing together the commercialisation arms of universities, Crown Research Institutes (CRIs) and several independent research institutes. Along with the supreme award, there were winners in six categories.

“I think that the key aspect of KiwiNet and the awards, in particular, is really just shining a spotlight on commercialisation of research and the impact that it can have,” Mackintosh said.

Mackintosh is based in Hamilton and was CEO of WaikatoLink, the University of Waikato’s commercialisation arm, before moving to Brandon Capital in 2016. The company describes itself as Australasia’s leading life science venture capital firm, which aims to transform medical research breakthroughs into therapies.

“I guess our gig is, how do we help those opportunities reach patients?”

Around 75% of Brandon’s investments were in seed capital to create companies out of research, he said. It generally stayed with companies for the long haul before exiting its position, he said.

A typical example was Spinifex, a company developing a drug for neuropathic pain, which Brandon Capital and other investors sold a few years ago to Novartis. Novartis paid US$200m ($337.1m) upfront for Spinifex back in 2015.

Unfortunately for Novartis, things didn’t turn out as hoped.

“This is the challenge with drug development. Subsequently, they found an issue with the development programme, and they ended up stopping development,” Mackintosh said.

In 2001, Mackintosh took a leadership role in the UK’s foot and mouth disease outbreak, which indirectly put him on the path to a career in research commercialisation.

“On the one hand, it was this incredible experience. There would have been 150 veterinarians from all around the world working to try and solve this problem.” 

But it was also soul-destroying, and he would hate to see it happen in NZ, he said.

“The impact on people and animals, on the economy was just phenomenal.”

During a phone call to his parents back home, Mackintosh’s father suggested a career in biotech: “He said, ‘I don’t quite understand it, but it sounds to me like an area that when you come home from the UK, you might want to look into’.”

He did. Mackintosh got in touch with NZ companies and said he’d love to be involved in the interface between science and business. 

“Every one of them took my meeting. These are CEOs of companies like Dexcel, which is now DairyNZ, gave me their time.”

“There’s not many countries where you could reach out to 20 people and get a meeting, and I think that hasn’t changed in NZ. I think that’s an opportunity for us as a nation, that connectivity and in generosity of giving.”

Since returning from the UK, Mackintosh had seen NZ become much better at commercialising research, but it still had a long way to go. 

“I think we have fabulous world-class research. The big challenge is how do we turn that research into opportunities?”

A good example of that was the CUREator programme, which was Australia’s national biotech incubator, he said. It was set up in 2021 by Brandon BioCatalyst, which is itself managed by Brandon Capital. 

There certainly needed to be more spending on the initial research, and NZ was far behind other countries, such as Israel, which spent 4.8% of GDP on research and development, Mackintosh said.

But the transition phase leading to commercialisation needs more government help, and Mackintosh isn’t afraid to use a phrase that is anathema to some. 

“I do think we could pick more winners … and really start to double down on those areas, and make sure that we’re actually providing enough resource that they really do have a chance of succeeding or failing.”

National’s reliance on the Emissions Trading Scheme to reduce greenhouse gas emissions would mean either very high carbon prices with flow-on effects for the cost of living, or New Zealand missing its international climate change commitments and paying billions, Labour says.

Labour’s newly released “climate manifesto” brings together existing and new policies on climate change. Part of the document is also an attack on National and what Labour says might happen if National leads the next government.

National has pledged to achieve the same emissions reductions as Labour and the targets currently in legislation and international agreements.

It said this will be done mainly through the Emissions Trading Scheme (ETS) as the main price and policy lever. National has also pledged to scrap emissions-reduction subsidies through the Government Investment in Decarbonising Industry Fund (GIDI) and use ETS  revenue to help cover the cost of tax cuts.

Labour’s manifesto argues that the Climate Change Commission’s modelling suggests only 20-23% of net emissions reductions could be driven by the ETS.

Removing complementary measures such as industrial subsidies would “likely require” an ETS price higher than $180 – “meaning everyone would pay at least 40c per litre on petrol”.

Officials estimated replacing the Clean Car Discount with the ETS would require an ETS price of about $575, which would see an extra $1.30 per litre on petrol price, the manifesto says.

Labour also argued that reliance on emissions pricing would mean an extra 400,000ha of new exotic carbon forest by 2050 – equivalent to all land used for sheep farming. This planting would mean emissions would not be reduced.

National has also expressed doubt about land being converted to forestry and has said it would look to limit this.

Labour argues that if National does not push up carbon prices to this amount, it would have to allow widespread forestry planting and/or fail to meet emission-reduction pledges made under the Paris Agreement, with the need to spend billions of dollars purchasing offshore carbon credits.

Other pledges in Labour’s climate manifesto include:

• A second emissions reduction plan that puts NZ on the path to achieving the second emissions budget.

• Establishing a minister for just transitions to oversee the transition to a low-emissions economy.

• A 12-point plan to increase renewable electricity generation.

• Supporting the growth of NZ Green Investment Finance by investing a further $300 million, bringing the total commitment to $1 billion.

• Making climate change a research and development priority, with an initial investment of $50m and a further $20m specifically to tackle challenging parts of the economy.

• Removing diesel generators from all schools, in addition to the current policy to remove all coal boilers.

• Reforming the ETS to drive gross emissions reduction, as recommended by the commission, and giving the commission more power over ETS settings.

Happy Valley Nutrition’s creditors have given the administrators permission to execute a deed of company arrangement in order to try to save the embattled milk processor. 

In August, the company’s creditors had given administrators an extra month to see if there is any substance in potential deals that could come to Happy Valley’s rescue.

The Australian stock exchange-listed company planned to build a dairy factory in the Waikato town of Ōtorohanga but ran out of capital.  

Those owed money by Happy Valley gathered in August to vote on whether to tip it into liquidation. 

McGrathNicol’s Andrew Grenfell and Kare Johnstone, who were appointed administrators in July, had recommended liquidating the company because no Deed of Company Arrangement (DoCA) had been proposed.  

However, in the days before their administrators’ report was released, the pair received two expressions of interest to potentially recapitalise the business, which could have resulted in a DoCA.  

At August’s meeting, creditors voted to adjourn the meeting for 30 working days to give the administrators time to work through the potential deals.  

Grenfell told BusinessDesk at the time that he couldn’t disclose who the expressions of interest were from.  

However, the extension was the maximum under the legislation and, during that time, they’d be working with the parties to try to progress their expression of interest and come up with something “more certain”, he said.  

At the creditors’ watershed meeting on Thursday in Auckland, it was resolved that the companies execute a deed of company arrangement.

The market update to the ASX indicated more time was needed. 

This would allow the companies to explore the possibility of recapitalising the companies and/or entering into a sale of all or part of the business and/or assets of the companies – in one or more transactions.

The sunset date – the ultimate deadline for the obligations to be met – under the holding DoCA is November 30. This date could be extended but in any event, no later than June 30 next year, the market announcement said.

Forest owners are furious over new charges being levied for forestry registered in the Emissions Trading Scheme.

The government has announced a new $30.25 per hectare charge for forests, as well as new fees for 22 services, such as changing the classification of exotic or indigenous areas and asking for more time to collect forest measurements.

The Ministry for Primary Industries (MPI) said the principle behind the charges is that those benefiting from having forests in the Emissions Trading Scheme (ETS) should pay those charges rather than having them funded by the New Zealand taxpayer.

But forestry investment firm Lewis Tucker said the new levy is an indiscriminate tax on the entire forestry sector that has been rammed through by MPI. 

It’s unhappy the levy was announced three weeks before a general election and while the government is carrying out a review of ETS settings.

The company has around 30,000ha in two rotational forestry funds. 

Communications consultant Jonathan Hill said the new levy – or tax – would add nearly $1 million to Lewis Tucker’s annual costs. 

“Within the sector, there’s a high level of discomfort around what’s come out [this week].”

That was at least as much as Lewis Tucker spent on pest control every year, he said.

“The fundamental concern we have is that layering this additional tax on the sector at such a high level will just encourage the exact behaviours that we’ve been trying to discourage, which encourages people to plant flat, highly productive farmland where they can maximise their financial return over a short period of time,” he said.

Lewis Tucker managing director Will Leckie said $30.25 a hectare is a colossal number. Under production forestry, the average cycle is 30 years, but carbon credits could only be claimed for 16 years. 

Leckie said any move to charge registered forest owners should have been tied in with changes to the ETS as a whole. Lewis Tucker is a strong believer in incentivising the right behaviour of forestry through the ETS, he said.

“We’re a strong believer in making sure that trees are put in the right place. We think the current mechanisms around the ETS could be tweaked to encourage the planting of more marginal farmland.” 

That could be done through measures such as allowing a longer-term rotation option to encourage trees to be planted on hill country far from ports. The current 16-year cycle encourages forest planting on flat, highly fertile, productive land, Leckie said. 

Hill said Lewis Tucker supports costs being recovered from the industry on a user-pays basis. 

“This is a flat, universal tax that has been levied across all foresters.

“I’m concerned about the precedent here. If a government department can turn around and levy a really significant new tax on a whole industry, in this case, forestry, where does that end, and what other sectors could this be applied to? It’s a very, very poor practice.”

The Forest Owners Association (FOA) also hit back, saying the levy is another government disincentive to plant forests when they are most needed. 

FOA president Grant Dodson said it is a huge jump to a more than $14m-a-year cost recovery and is neither reasonable nor equitable.

“The ETS is for a public benefit. It has no other basis for existing other than to store carbon from the atmosphere to combat climate change, and that is of benefit to all New Zealanders,” he said.

Dodson said foresters had no say in setting up what he called a needlessly complicated scheme. 

He had talked to one forester with a 600ha block who will now be liable for an $18,000 annual charge but receives no services from the ETS administration. 

“He’s wondering why he’s in the ETS.”

Farm Forestry Association president Neil Cullen said small-scale woodlot owners are also facing huge increases because of the new charges for 22 different ETS services. 

“If someone transfers their ETS participation to someone else, then they will be charged $990 just for entering a new name in the system. How much work will that take?”

As at December 31, 2022, there were some 540,000ha of post-1989 forest land in the ETS.

The jury is out on the cost implications of the European Union’s move to clip on an emissions surcharge for all ships into EU ports.

But with EU carbon pricing sitting at more than double the New Zealand unit level, it’s not likely to be cheap.

The move follows new legislation requiring cargo and passenger ships of more than 5000 gross tonnes for their carbon emissions under an expanded EU emissions trading scheme (ETS) from January 1 next year.

The EU ETS, the world’s first emissions trading system, aims to reduce greenhouse gas emissions (GHG) by at least 55% by 2030 and ‘climate neutrality’ for EU members by 2050. 

Under the extension, EU ports will levy 50% of CO2 emissions from voyages that start or end at EU ports – for example, from Tauranga to Zeebrugge, Belgium, or 100% of emissions that occur between two EU ports. 

The rules will apply to all ships, regardless of which flag they fly.

According to carboncredits.com’s live pricing, EU carbon prices were trading on Thursday at €82.76 (NZ$148.86) per unit tonne of CO2. For comparison, the spot NZ unit price ws sitting at about $66.50 at the same time.

The new rules will be phased in over the next few years. Shipping companies must buy and surrender allowances of 40% of applicable emissions next year, 70% from 2025, and 100% from 2027.

The Ministry of Foreign Affairs and Trade (MFAT) reports that under the legislation, each of the 27 EU member state authorities will handle monitoring and compliance.

For non-EU shippers, scheme administration will fall to the member state that “the company visits most frequently in a two-year period”.

A report on international shipping by the International Energy Agency suggests maritime emissions accounted for about 2% of global greenhouse gas emissions last year. 

That was after climbing 5% that year from 603 megatonnes (million metric tonnes) to 706 Mt, following declines through the pandemic years in 2020 and 2021. 

However, the largest shipping companies have been moving to transition their fleets to lower-emitting fuels. 

Danish giant AP Moller-Maersk – the world’s second biggest shipper with almost 700 vessels and a fleet capacity of 23 million ton twenty-foot equivalent units (TEU) last year – has so far ordered 25 emissions-friendly vessels. 

It’s just received the first vessel – the Laura Maersk – of six mid-sized container ships using green methanol and oil engines.

A Maersk spokesperson said while the cost of the legislation will increase over the coming years, it expects the direct impacts to NZ exporters to Europe to be about US$21 (NZ$35.50) FFE (forty foot equipment) for dry cargo and about US$32 for reefer (refrigerated) cargo. 

The cost of shipping  goods can vary widely due to a number of factors but, to give an idea of scale, the typical shipping container currently costs about NZ$1,200 to send to Europe.

However, a spokesperson for the country’s largest shipping company, Kotahi, said it couldn’t yet advise BusinessDesk of the cost implications of the European move.

The company, formed in 2011 by Fonterra and the meat company Silver Fern Farms – who both export most of their products – shipped more than 300,000 TEU containers out of nine NZ ports last year.

Fonterra chief financial officer Neil Beaumont said the move reflected the growing global trend of legislators responding to what voters and consumers are looking for and establishing levers to lower emissions to reach their climate goals. 

The size of the EU as a bloc made it a “consequential development”, but Beaumont said it was less about the impacts on Fonterra’s market access than illustrating a “direction of travel”.

That, he said, reinforced Fonterra’s focus on creating efficiencies around how it managed emissions. 

That ‘direction of travel’ would include the EU’s carbon border adjustment mechanism scheme, announced last month. 

That scheme, which so far applies only to cement, aluminium, electricity, hydrogen, iron or steel imported to EU countries, means exporters will be charged for embedded carbon emissions.

In a note to NZ exporters, NZ Trade and Enterprise said players in those sectors will have to calculate and verify emissions embedded in their imports and report them to the EU from next month until the end of 2025. 

From 2026, those embedded emissions will need to be paid for as an offset between the EU and NZ carbon price under the two respective ETS schemes. 

Those costs could stack up at the current price, particularly given that EU carbon prices are trading at more than double the NZ ETS unit price.

Blackrock-owned New Zealand solar power company solarZero is the target for the largest-ever investment to be made by the government’s NZ Green Investment Fund.

NZGIF is placing $80 million of its capital alongside $90m from two international investors, Sydney-based First Sentier Investors and Paris-headquartered global funds manager Natixis, to create a new investment-grade class of certified lending for solar electricity installations.

The whole $170m raised will allow Auckland-based solarZero to refinance existing debt, with a view to further such financing to match the firm’s fast-growing business to the 20-year lifespan of the contracts it writes with its customers, solarZero chief executive Matt Ward said.

“We are currently deploying about $10 million a month” equating to about 400 domestic rooftop solar and battery kits valued at $25,000 apiece, said Ward. That has grown from about 200 installations a month two years ago, and the company could see capital needs well beyond the runway created by the NZGIF funding.

SolarZero has operated in the NZ market for more than 20 years and sold to global investor BlackRock Investments last year; it had been working with NZGIF on the newly announced structure long before the BlackRock sale occurred.

BlackRock announced recently it was seeking participants for a $2 billion NZ decarbonisation fund.

SolarZero took the top award for innovation at the Energy Excellence Awards in Christchurch earlier this month for its novel business model for making solar power affordable for households.

The company differs from other retailers of solar electricity in that it funds and continues to own the solar installations while charging customers a fee intended to be lower than an average monthly power bill. 

This asset ownership model was a key element in being able to structure an investment-grade offering for private investors to back the NZGIF bond initiative, the fund’s chief executive, Jason Patrick, said.

SolarZero also generates revenue by aggregating the electricity stored in rooftop solar systems’ batteries around the country to sell back into the national grid at times of high demand when wholesale power prices are spiking.

The company gained funding from the government’s decarbonisation research agency, Ara Ake, to pilot this system, known as a virtual power plant (VPP), over the course of this winter.

The VPP is capable of fulfilling the same role as a gas-fired fast-start peaker plant, except that it generates no greenhouse gas emissions and offers instant energy, whereas a gas peaker needs time to fire up. 

Electricity market participants pay both a fee for access to the VPP’s output and the going rate for electricity that it produces when needed.

The NZGIF announcement characterised the agreement as “initially” financing the country’s “largest residential PPA [power purchase agreement] portfolio”, managed by solarZero – in effect, the VPP structure.

Ward cited commercial confidentiality on the interest rate that SolarZero will pay on its replacement debt finance via NZGIF but said there are advantages in having long-term arrangements locked in on terms that allow the firm to amortise debt across the lifetime of a solar rooftop installation contract.

“Replacing short-term floating rate debt with longer-term fixed rate options will allow New Zealand solar providers to be able to access the NZGIF Solar Finance programme soon,” Patrick said.

SolarZero is “the first beneficiary of the scheme”, he said.

NZGIF last week announced $15m in debt funding for another solar firm, LightYears Solar, to build small-scale, on-farm solar production capacity that could feed into local electricity networks without needing to be connected to the national grid.

In July, it announced a $15m working capital facility for commercial-scale solar farm provider Lodestone Energy.

NZGIF has more than $700m in total funds and has invested a little more than $400m so far. It targets partnerships with private sector initiatives and funding sources to accelerate decarbonisation investment in NZ.

The NZGIF announcement coincided with the Labour party announcing a policy that promises a $4000 rebate for solar installations: $2000 off the cost of the rooftop solar array and $2000 off the cost of a battery, lowering the cost of panels and battery for a typical home installation from about $25,000 to about $21,000.

The funds raised under the latest NZGIF initiative are certified under the Climate Bonds Initiative, a scheme used internationally “to provide confidence that investments are consistent with what we must do to address the climate emergency”, Climate Bonds Initiative chief executive Sean Kidney said.

Natixis Asia Pacific head of private debt real assets, Angus Davidson, said: “Distributed renewables and storage are compelling markets, particularly in NZ.”

A2 Milk’s move to cancel its exclusive manufacturing and supply agreement with Synlait may be all about getting Mataura Valley Milk into the black.

A2 Milk owns 75% of Mataura Valley Milk (MVM) in partnership with China Animal Husbandry Group, which owns 25%. It bought the Southland dairy company in 2021 for $268.5 million to provide “supply diversification”.

In the year to June 30, MVM reported earnings before interest, taxes, depreciation and amortisation loss of $26.5m. That was wider than the $18.8m loss in the prior year.

A2 Milk has consistently said accelerating MVM’s path to profitability by FY26 or earlier is a key strategic priority.

On Monday, a2 Milk said it had notified Synlait that it was cancelling the exclusive supply rights because Synlait had fallen below delivery standards.

The deal covers stages 1 to 3 of a2 Milk’s current infant milk formula products sold in China, Australia and New Zealand.

Synlait, meanwhile, came out swinging and said it disputes that a2 Milk has the right to cancel the arrangements.

It also underscored that it continues to hold the Chinese regulatory State Administration for Market Regulation (SAMR) licence, which is attached to Synlait’s Dunsandel manufacturing facilities.

The licence is for a2 Milk’s Chinese-labelled infant formula.

While a2 Milk can’t currently produce that formula without Synlait, the removal would give it the option to produce a2 Platinum, the brand of its current English label product, at any facility in the future, including MVM, it said.

In the past, a2 Milk has clearly indicated its intent to obtain additional China-label infant milk formula registration and to leverage its manufacturing capability MVM.

“A2 has had ambitions to gain more control of its supply channel, particularly with regard to obtaining another licence for launching a second China-label product, so perhaps this shouldn’t be a complete surprise,” Craig Stent, executive director of portfolio manager at Harbour Asset Management, said.  

He noted, however, that it currently only impacts a2 Milk’s English label, with the SAMR regulatory licence sitting with Synlait.

“With the removal of the exclusivity, it may give a2 the option to produce its English label through Mataura Valley Milk; however, this is likely to be gradual,” he said.

Neither a2 Milk or Synlait is expecting an overnight change.

A2 Milk expects any dispute resolution process to “take some time to complete” and will maintain the exclusivity until the dispute is resolved, assuming it is resolved by the end of 2024.

Synlait Milk said the announcement has no impact on its FY23 financial result, due to be reported on September 25.

It also said the announcement is not expected to impact Synlait’s full-year 2024 results.

Synlait expects to manufacture Chinese-labelled products for a2 Milk for the period of the SAMR licence, which currently expires in September 2027.

Matthew Goodson, managing director of Salt Funds Management, expects an extended period of negotiation given that a breach of contract has been alleged in regard to Synlait’s product delivery.

This may mean a2 moves some English-label production to its Mataura Valley plant.

“I would read it as a sensible but hard-nosed negotiating position from a2, with Synlait’s extended balance sheet potentially being problematic.”

Goodson noted that Synlait has a $180m bond that matures in December 2024. It was issued at 3.83% but last traded at 15.72%.

Synlait’s shares ended down 9.4% at $1.16 on Monday, while a2 fell 1% to $4.88. 

Sealord has crowned itself New Zealand’s lord of the sea with the acquisition of Independent Fisheries.

The fisheries company has announced it will become the country’s biggest seafood business through the agreement to buy privately owned Independent Fisheries, one of NZ’s largest deep-sea fishing companies. 

Sealord won’t comment on how much the deal cost but described it as “the largest financial transaction in the seafood sector” since the Sealord deal in 1992, part of the Māori Treaty Settlement and which NZ First’s Shane Jones described to BusinessDesk as the “jewel in the crown”.

Jones was part of the Treaty of Waitangi Fisheries Commission and also chair of Sealord in the early 2000s. He said it was one thing to amass quota and another thing to consistently generate earnings from it.

“That’s something I think that not only the owners will be conscious of, but it’s a great challenge for the managers.”

“It’s really important to note that Māoridom is increasing its footprint across commercial fisheries,” Jones said.

He pointed to the long-term lease between Moana and Sanford and Aotearoa Fisheries having a 50% ownership of Sealord, alongside Japanese fishing giant Nissui, which owns the remaining 50%.

Jones said, presumably, the leases give both parties better access to a broader base of fishing quota that enables them to expand throughput and expand revenue.

“But all of these things require confidence that the earnings justify the risk.”

Terra Moana partner Tony Craig said quota management systems aren’t like factories – once a quota system is brought in, “you’re then stuck with a volume production that you can’t naturally increase”.

Quota management systems are good for the fisheries, he said, as it means they are managed better, but there is a social consequence through the loss of small-scale owner-operator fishermen.

“That’s what this is all about, really. It’s making sure those companies can remain profitable by doing what they’ve always done because they can’t diversify,” Craig said.

“They’re not like sheep farmers who can decide to go dairy farming if there’s no money in sheep.”

Port Nicholson Fisheries director Tom McClurg said Sealord is the “logical buyer” of Independent Fisheries.

“They’re engaged in very similar fisheries, so I think it’s a good fit with Sealord,” he said.

Where implications lie for the sector, however, is how the fisheries sector gets around arising fleet renewal issues. 

McClurg said Independent Fisheries is “very reliant” on Ukrainian charter vessels to catch its quota.

“It’s a piece in a bigger puzzle because all of the deepwater fishing companies in New Zealand have an issue with fleet renewal and how you finance those kinds of vessels.

“In some ways, bringing Independent Fisheries and Sealord together is a step towards that big picture view of what vessels we really need in New Zealand, owned by New Zealand, to catch our deep-water fish.”

Scheduled rail freight services to Napier resume on September 18, after a seven-month halt since the line was badly damaged by Cyclone Gabrielle.

KiwiRail chief executive Peter Reidy said the line’s reopening – allowing rail freight to get to Napier Port – is an important step in the region’s recovery.

“Napier Port is a key part of central New Zealand’s economy, and to once again get our customers’ freight to and from the port efficiently, and using low-emissions rail, is an important step toward reinstating the Hawke’s Bay supply chain and ensuring the region’s economic success.”

The port’s chief executive Todd Dawson said it is positive for Hawke’s Bay, but also for cargo owners throughout the North Island who rely on the port and the many international shipping services that call into the wharf.

“As one of NZ’s key international gateways with good capacity across our wharves, Napier Port is a vital link in the NZ supply chain. 

“Reinstating the rail line to connect directly through to our container terminal and bulk cargo yards means increased efficiency and service to customers needing to move cargo in and out of the North Island, as well as adding resilience and more value to the NZ Inc supply chain,” he said.

Chilled and frozen meat, wood products such as logs, pulp and timber, food products and imported machinery and consumables used in manufacturing are usually carried by rail.

Following the cyclone in February, KiwiRail reopened the Palmerston North-Gisborne line to Hastings at the start of April. 

Temporary container terminal sites were also set up in partnership with the port, transport operators and cargo customers, so freight could be sent by rail to Hastings, then trucked to Napier.

The section of line between Hastings and Napier, particularly around Awatoto, was badly damaged in the cyclone, with track and embankments washed away and major damage to bridge 217, which lost piers and spans in the floods.

The work included rebuilding 2m-high embankments, replacing 800 sleepers and 140m of rail, laying 3000 cubic metres of formation and 3500 tonnes of ballast.

KiwiRail also railed steel casings to Hastings from Christchurch for replacement bridge piers on bridge 217 – which had been driven 30m into the riverbed.