In today's email we discussed the evolution of protein sources away from milk and meat, New Zealand's woeful productivity and the delay to replacing our maritime surveillance aircraft.
1. Rod Oram's column on meat alternatives
I grew up on a dairy farm five decades ago convinced that there was no alternative to the milk I used to collect straight from the vat as a kid. I couldn't imagine a roast meat meal that didn't have lamb or beef in it (pork and chicken was too fancy for us in the 1970s).
Yet when I look in my fridge these days my bottle of milk is outnumbered by a collection of oatmilks, soy milks and rice milks because the rest of my family is dairy-free. We regularly have chicken-free chicken strips and beef-free beef strips for dinner.
The times they definitely are a changin' for our farmers, as Rod Oram explores in this week's column. He looks at the challenges in a world where plant-based meat imitations are already being rolled out through US fast food chains and lab-grown meat is five to 10 years away from mass production.
He writes that in US grocery stores alternative proteins across all food categories already account for some 10-20 percent of the display space of conventional proteins, and are growing four to 10 times faster.
The enormous technology challenge and market potential has attracted Silicon Valley. Last year, for example, Eric Schmidt, one of Google’s founders, said lab-grown meat was the number one tech trend, ahead of self-driving cars and 3-D printing. Likewise, Bill Gates has invested in Memphis Meats, one of the sector’s pioneers; and Europe has similar venture capitalists in this field.
Rod reports on what a US company called Finless Foods is doing. It is growing fish flesh from cells of bluefin tuna, and it plans to go into commercial production next year. It has some advances over similar start-ups in the red meat sector, Mike Selden, its founder and chief executive, said when Rod interviewed him in January at the company, which is based in a tech start-up complex close to the University of California, Berkeley.
First, fish cells grow at low temperatures, whereas red meat cells need a high and carefully-controlled temperature. Second, “we’re shaping our technology to fit off the shelf manufacturing.” This will allow Finless Foods to contract out manufacturing to established biotech companies. Third, bluefin stocks are endangered so some restaurants won’t offer them, or some consumers won’t eat them. Thus, cultured bluefin flesh will be a premium, sustainable product that will attract them.
See Rod's full column here on Newsroom Pro, where it was published first this morning. The column will be posted on Newsroom on Sunday.
2. A woeful productivity story
The economy has yet to break its bad habits. December quarter figures showed the lowest annual per capita GDP growth in seven years and GDP per hour worked (a rough proxy for productivity) rising just 0.2 percent for the year.
Employers used immigration of cheap workers to keep growing at the end of 2017, putting off the tough decisions and investment needed to boost productivity and real wages. As I reported yesterday, the incentives remain to invest in property for tax free capital gain, rather than than more efficient businesses or technology that would make workers more productive..
Thomas Coughlan reported yesterday overall GDP grew a slightly lower than expected at 0.6 percent for the December quarter. That took annual economic growth to 2.9 percent, but GDP growth only tells half the story.
The numbers show the continuation of a disturbing trend of GDP growth not translating into growth in GDP per capita. That means the economy is getting bigger because extra people are being added, not because people are being more efficient and becoming richer from their work.
The 0.6 percent number was only slightly below the market median forecast of 0.8 percent and the Reserve Bank’s forecast of 0.7 percent. The dry start to the summer saw farm output fall. Economists said it was good enough to show that the fall in business confidence reported after Labour took office had not fed through to the real economy.
But that's where the good news ends. GDP per capita, a measure of the economic gains booked per person, lagged far behind at 0.1 percent, down from an equally dismal 0.2 percent in the quarter before.
3. Delaying our Poseidon adventure
The Australians may not be thrilled with this, but Ron Mark is taking some extra time for the Government to decide how to replace our ageing fleet of Orion maritime surveillance aircraft. They are older than I am, having being bought in 1966. I was a 1967 baby.
Newsroom's Foreign Affairs and Trade Editor Sam Sachdeva reports the $2 billion decision has been kicked down the road, with the Defence Minister saying he has secured “a window” to review his predecessor’s plans.
Mark says the Government will not be dragged into making a hasty decision on whether to purchase four Boeing P-8A Poseidons (see above) from the United States. The Poseidons are based on the 737-800.
In April last year, the US Defense Security Cooperation Agency released details of the “potential sale” of the P-8As to NZDF to replace the retiring P-3 Orion fleet, at an estimated cost of up to US$1.46b (NZ$2b).
It’s understood the option to purchase the aircraft was due to expire at the end of March. However, Mark told Newsroom the Government had spoken to US Defense Secretary Jim Mattis about the potential sale and indicated it had received an extension.
“This government’s not going to rush a decision and make an imprudent decision - if there are other options that have been ruled out, I’m looking at why and testing the validity...
“I’m comfortable with where we are right now - I know I have a window, and we aim to fit within that.”
4. 'This will hurt our democracy'
A group of political and legal academics has urged the Government to scrap its controversial waka-jumping bill, calling it an “undesirable and harmful” law which could damage New Zealand’s democracy.
Sam Sachdeva reports The Electoral (Integrity) Amendment Bill, which would force list MPs out of Parliament if they quit or were expelled from their party and require electorate MPs to contest a by-election, passed its first reading in January.
The bill was part of New Zealand First’s coalition agreement with Labour, but has attracted criticism from some who claim it will hurt New Zealand’s political process.
In a submission to Parliament’s justice and electoral committee, provided in advance to Newsroom, the group of nearly 20 legal academics and political scientists said the bill should not proceed “with or without amendment”.
“We believe that it represents an undesirable and harmful extension of legal regulation into an area that is better controlled by political imperatives and electoral judgments," their submission said.
“No matter how well intentioned, this proposed legislation will have negative effects on our system of representative democracy."
See Sam's full report here on Newsroom Pro, where it was first published yesterday.
5. DOC urged to block big dairy conversion
Newsroom's South Island reporter David Williams has been keeping a close eye on one of the flashpoints in the ongoing battle between environmental groups and big dairy conversions.
He reports this morning an environmental group wants Conservation Minister Eugenie Sage to step in to protect ecological values of Crown-owned land in the Mackenzie Basin, which will be destroyed by a planned dairy conversion.
The Department of Conservation says it is investigating whether an irrigation pipeline being built in the Mackenzie Basin affects conservation values on public land.
The below-ground pipeline is being buried in trenches running eight kilometres from a Tekapo hydroelectricity canal to Simons Pass Station. The station is a mix of Crown pastoral lease (which is late in the tenure review process) and private freehold land. Water from the pipeline will supply a planned intensive dairy farm operation which could run as many as 15,000 cows.
In a statement to Newsroom, DOC’s director of planning permissions and land, Marie Long, says: “We are working to ensure that any development is within the conditions of its consent. As this investigation is ongoing, we aren’t able to provide further detail at this point.”
The investigation is apparently news to Dunedin accountant Murray Valentine, the lessee of Simons Pass, near Lake Pukaki. “I’d be very happy to answer the phone, but no one’s rung me.”
6. Weekend Reads
I'm fascinated with how algorithms shape our perceptions of the world and decide what we should and shouldn't see, for good and for ill. They could be from Facebook, Google, Twitter or Amazon, and they work out what excites our neural networks.
New York Times columnist Zeynep Tufekci has written this excellent analysis of how Youtube's algorithms have radicalised viewers.
This piece from Yascha Mounk in the Observer asks whether the age of liberal democracy, which seemed to be marching towards eventual triumph, may be ending under a welter of populist revolts because the elites ignored the effects of their economic policies since the late 1980s.
Mounk makes the good point that the young have no experience of totalitarianism.
"The very fact that young people have so little idea of what it would mean to live in a system other than their own may make them willing to engage in political experimentation. Used to seeing and criticising the (very real) injustices and hypocrisies of the system in which they grew up, many of them have mistakenly started to take its positive aspects for granted."
Interestingly, Google has just banned advertisements for bitcoin and other cryptocurrencies, appearing to worry they are often vehicles for scams, the New York Times reports.
Just imagine if you could ban the eye roll. China tried this week. This story is a sort of hilarious and scary example of how strange our world is now.
I think a lot about public discourse and how to make it healthier in the age of the internet. Andrew Marantz has written a thoughtful piece at The New Yorker on how to detoxify the internet.
7. One fun thing...
This comment from Donald Trump's new economic adviser Larry Kudlow (a CNBC commentator) took my fancy: "Kudlow: U.S. could lead coalition of large trading partners against China. "A trade coalition of the willing."
Er. That was the TPP. That your new boss pulled out of in his first few days on the job...
8. This morning's political links
These are available with the morning subscriber email