Jacinda

[pete376403]

Yes, but when National are borrowing money it's to fund tax cuts for rich people, which is acceptable because they'll use it to invest in business (and certainly not to buy a new boat or holiday house). Then all we have to do is wait for that money to trickle down to the workers, and the economy is saved.

Labour just borrow money so people can buy food and pay their bills, and that money (less the 15% they take straight back) just goes directly into the economy so does no good at all

Obviously a sarcasm emoji is needed here. Trickle down theory (first started as a joke by Will Rogers and then accepted by that well known economist and cowboy actor Reagan ) has been widely proven not to work https://www.washingtonpost.com/busin...-trickle-down/ While there are a few philanthropic exceptions to the billionaires running off and hiding with their money, there are not many, and not enough to offset the harm done by the rest. Not much trickling down to be seen here https://fortune.com/2021/12/07/world...ring-pandemic/

[Viking01]

If the Government gives people money - you have increased the money supply, without increasing the supply of goods and services, therefore the demand curve shifts to the right and everything gets more expensive (Monetary Inflation) - See the US currently, Weimar republic in the 1930s, Zimbabwe in 2007 etc. etc.

If the Government Invests Money - paying instead for goods and services (like building a road) - then the supply of goods and services has increased, therefore the rightward shift of the demand curve is offset by a rightward shift in the supply curve.

You don't get the massive inflation and everyone is better off.

So, what happens if the "supply" aspect (of the supply of goods and services) is unable to be physically met ?
Like manufacture of gib-board as an example ? Or a choked "supply chain" affecting goods sourced from overseas ?

[TheDemonLord]

So, what happens if the "supply" aspect (of the supply of goods and services) is unable to be physically met ?
Like manufacture of gib-board as an example ? Or a choked "supply chain" affecting goods sourced from overseas ?

In a perfect market, there would be an increase in supply (as people switch to more profitable production/services) to cover the high demand.

In reality though, there's often a lead time between the increase demand and the increase in supply.


Still better than Government intervention though.

[neels]

In a perfect market,

And that exactly is the problem with trying to apply economic theory to the real world.

[pete376403]

In a perfect market, there would be an increase in supply (as people switch to more profitable production/services) to cover the high demand.

In reality though, there's often a lead time between the increase demand and the increase in supply.


Still better than Government intervention though.

But is it? Wasn't it government intervention that led to the availability of alternate plaster boards? "The Ministry of Building, Innovation and Employment started looking at how to free up plasterboard supplies during a nationwide shortage of the popular building product.

Twelve importers of plasterboard - four of them new - have 100 containers on their way to New Zealand.

Elephant Board, USG Boral, ProRoc and SaveBOARD now meet Building Code requirements and have been approved for sale."

No doubt your response will be to blame the government having building code requirements in the first place, but these are all that stand between free marketeer builders and us living in cardboard boxes.

[F5 Dave]

Cardboard boxes with attractive stipple coating..

[TheDemonLord]

And that exactly is the problem with trying to apply economic theory to the real world.

Granted there are aspects which take time and don't work as perfectly as theory would suggest.

There are other aspects, such as monetary inflation, minimum and maximum prices and trying to tax above the optimal rate that work almost exactly according to Theory.

[TheDemonLord]

But is it? Wasn't it government intervention that led to the availability of alternate plaster boards? "The Ministry of Building, Innovation and Employment started looking at how to free up plasterboard supplies during a nationwide shortage of the popular building product.

Twelve importers of plasterboard - four of them new - have 100 containers on their way to New Zealand.

Elephant Board, USG Boral, ProRoc and SaveBOARD now meet Building Code requirements and have been approved for sale."

No doubt your response will be to blame the government having building code requirements in the first place, but these are all that stand between free marketeer builders and us living in cardboard boxes.

Well, if the Government fixes a problem (debatable), then usually they caused it.

Such as locking down the area that supplies 95% of a certain building material.

Or paying people money so that they otherwise don't want to work.

Or not having approved other materials for use, even though they met our standards.

The list goes on.

[Viking01]

Well, if the Government fixes a problem (debatable), then usually they caused it.

Such as locking down the area that supplies 95% of a certain building material.

Or paying people money so that they otherwise don't want to work.

Or not having approved other materials for use, even though they met our standards.

The list goes on.

Morning.

I wouldn't deny that (i) lock-down and (ii) product approval were in some small part contributors to / affecting the delivery of the new Gib manufacturing plant or sourcing of alternative products.

I have to admit smiling when I saw a recent TV interview of Ross Taylor (Fletcher Building CEO), effectively in response to pressure from Simplicity and the NZ Shareholders Association. He looked decidedly uncomfortable answering questions. It's amazing what a little more-public discussion on market share and share price can do to focus director and management attention.

https://www.rnz.co.nz/news/national/...board-shortage

RNZ posted a separate radio interview around the same time which is interesting (15 minutes). Taylor certainly had a problem with pronouncing the word "monopoly":

https://www.rnz.co.nz/national/progr...d-fletcher-ceo

It's just as well that Taylor confirmed that Gib stock-piling was not an issue, and that any preferential treatment for supply of Gib was largely due to third parties (major retailers and their own supply agreements):

https://www.stuff.co.nz/business/128...-video-emerges

No doubt, Taylor will be hoping that their new Gib manufacturing plant is commissioned and in operation by due date. Even if only to head off those who might - in the interim - decide to (i) actively explore the foreign product importation route (ii) take any related action needed to clear away potential product trademark and allowable product substitution / approval hurdles.

I am surprised that the "building industry" had not been more pro-active in investigating alternative overseas suppliers and identifying / clearing potential trade-mark / approval issues (given the potential impact upon builders). But then, I'll openly admit to not knowing much about this industry and how it operates.

https://www.rnz.co.nz/news/business/...try-federation

I wonder whether regulators and local councils will also "step up to the plate", and allow changes to existing (approved) building consents - for product substitution - to be made in a more timely manner.

https://www.rnz.co.nz/news/national/...ck-on-red-tape

[husaberg]

Lets be clear here Fletchers the owners of Gib manufacturing and distributing have stopped other products being imported due to their colour.
Making out its anything else other then them trying to corner a captive market is utter horseshit.

https://thespinoff.co.nz/business/16...emark-a-colour

NZ continues to face a shortage of Gib plasterboard, which is manufactured solely by Winstone Wallboards, a subsidiary of listed building and construction giant Fletcher Building. Fletcher Building controls an estimated 95% of the plasterboard market. Demand is going gangbusters, yet supply remains strained. So housing developer Simplicity Living cancelled its Gib orders and looked overseas for supply, securing high-quality plasterboard from Thailand at a cheaper price. “There’s a cost of building crisis in New Zealand, and the hubris of Fletcher Building is only making it worse. So we’re doing something about it,” said Simplicity Living managing director Shane Brealey.

However, Simplicity Living was told it couldn’t import blue, let alone mauve, green and pink, plasterboard because the colours were trademarked by Fletcher Building. Brealey told Stuff he believed the trademarks were “clear blocking tactics”

Fletchers control 94% of NZ plasterboard.

The power of a monopoly
Kevin Van Hest,​ owner of Elephantboard, says in his 34 years as a competitor to Gib, Fletcher Building has thrown everything at him, “including the kitchen sink”.
Established in 1988 and with 3% to 4% of the market, Elephantboard is Gib’s largest, and longest running competitor.
While major corporations such as CRS, Knauf, and USG Boral tried and failed to enter the New Zealand plasterboard market, Van Hest​ has managed to stick around.
“We’ve survived because we run this place on the smell of an oily rag. We have a few loyal customers with an anti-monopoly sentiment, and thank God for them,” Van Hest​ said.

van Hest says customers are regularly thwarted by established construction interests. "Building merchants have to hide Elephant Board under a blanket in the warehouse out back because of preferred supplied agreements."

These deals prevent them maintaining stocks of the competing Elephant board, he says; architects specify "Gib" as if it were a generic term for plasterboard; and council inspectors are inflexible about allowing builders to swap it out.

Gib is a sponsor of the New Zealand Institute of Architects, Building Officials Institute of New Zealand, the New Zealand Institute of Building, the Design Association of New Zealand, the New Zealand Institute of Building Surveyors, New Zealand Institute of Quantity Surveyors, to name some examples.

A spokesperson from Fletcher Building said the support for the various building groups came in the form of financial assistance for operations, paying for conferences and member events, and providing training.

A former manager of plasterboard at building supply chain Carters, who wished to remain anonymous because he still works in the building industry, highlighted events which were ultimately scrutinised by the Commerce Commission, but not upheld.

In 2013, he said, Elephant Plasterboard was gaining traction in Waikato. In response, he claimed, Fletcher Building flooded Waikato Carters stores with Gib, effectively dropping the price of plasterboard in the region and pulling builders away from Elephantboard.

van Hest says customers are regularly thwarted by established construction interests. "Building merchants have to hide Elephant Board under a blanket in the warehouse out back because of preferred supplied agreements."

The Fletcher Building spokesperson denied this claim, and said the Commerce Commission had investigated claims against the company of such predatory activity in 2014

https://www.nzherald.co.nz/business/...RLNJ5PG3QRT5E/

Another construction industry player has criticised Fletcher Building's dominant position in New Zealand's plasterboard market via its Winstone Wallboards.

Geoff Tully of lightweight steel framing business Gammabracing said he had observed the situation and backed calls for change.

That follows criticism from Kevin van Hest of Elephant Plasterboard in Glendene and Coen Willemse who worked on houses in Christchurch, both saying they had seen how sales of non-Gib products were limited.

"One of the questions that needs to be asked is why Fletcher representatives are on most industry boards of governance, such as standards and construction research organisations," Tully asked.

[TheDemonLord]

Morning.

I wouldn't deny that (i) lock-down and (ii) product approval were in some small part contributors to / affecting the delivery of the new Gib manufacturing plant or sourcing of alternative products.

I have to admit smiling when I saw a recent TV interview of Ross Taylor (Fletcher Building CEO), effectively in response to pressure from Simplicity and the NZ Shareholders Association. He looked decidedly uncomfortable answering questions. It's amazing what a little more-public discussion on market share and share price can do to focus director and management attention.

https://www.rnz.co.nz/news/national/...board-shortage

RNZ posted a separate radio interview around the same time which is interesting (15 minutes). Taylor certainly had a problem with pronouncing the word "monopoly":

https://www.rnz.co.nz/national/progr...d-fletcher-ceo

It's just as well that Taylor confirmed that Gib stock-piling was not an issue, and that any preferential treatment for supply of Gib was largely due to third parties (major retailers and their own supply agreements):

https://www.stuff.co.nz/business/128...-video-emerges

No doubt, Taylor will be hoping that their new Gib manufacturing plant is commissioned and in operation by due date. Even if only to head off those who might - in the interim - decide to (i) actively explore the foreign product importation route (ii) take any related action needed to clear away potential product trademark and allowable product substitution / approval hurdles.

I am surprised that the "building industry" had not been more pro-active in investigating alternative overseas suppliers and identifying / clearing potential trade-mark / approval issues (given the potential impact upon builders). But then, I'll openly admit to not knowing much about this industry and how it operates.

https://www.rnz.co.nz/news/business/...try-federation

I wonder whether regulators and local councils will also "step up to the plate", and allow changes to existing (approved) building consents - for product substitution - to be made in a more timely manner.

https://www.rnz.co.nz/news/national/...ck-on-red-tape

See, I completely agree with the Monopoly aspect in a purely economics term - that is Monopolies are generally bad, even natural Monopolies.

However, the thing that causes me a moments pause - up until this point - did anyone, anywhere in NZ have a problem with GIB having a Monopoly per se or any of the problems typically associated with Monopolies?

Prior to this (which IMO was at least 70% caused by Government Policy) - there weren't shortage issues, nor where there pricing issues, nor exclusivity deals/exclusionary deals with retailers or bundling issues (the typical abuses that we see with Monopolies).

So if I put my Economics hat on - yes, Monopolies are bad and Competition is almost always best for Industry and the consumer blah blah blah

In reality though - until the Government fucked things up - was GIB/Winstones doing anything negative that we would usually associate with Monopoly behaviour?

To that end - If everyone was happy with the previous arrangement (GIB was cheap, plentiful and available anywhere without any strings) and there's a fair amount of evidence to suggest that was the case - then they aren't engaging in the typical monopolistic way that is dubious/unethical.

[pete376403]

So if I put my Economics hat on - yes, Monopolies are bad and Competition is almost always best for Industry and the consumer blah blah blah

In reality though - until the Government fucked things up - was GIB/Winstones doing anything negative that we would usually associate with Monopoly behaviour?.

You mean like this? "In 2013, he said, Elephant Plasterboard was gaining traction in Waikato. In response, he claimed, Fletcher Building flooded Waikato Carters stores with Gib, effectively dropping the price of plasterboard in the region and pulling builders away from Elephantboard." Usually that's referred to as dumping. That the "the Commerce Commission had investigated claims against the company of such predatory activity in 2014" doesn't mean much, the ComCom is pretty toothless at the best of times.

[Viking01]

You mean like this? "In 2013, he said, Elephant Plasterboard was gaining traction in Waikato. In response, he claimed, Fletcher Building flooded Waikato Carters stores with Gib, effectively dropping the price of plasterboard in the region and pulling builders away from Elephantboard." Usually that's referred to as dumping. That the "the Commerce Commission had investigated claims against the company of such predatory activity in 2014" doesn't mean much, the ComCom is pretty toothless at the best of times.

Pete376403,

That word "dumping" has such a negative connotation. I'm sure they were just "responding to increased market demand" in that area, and they simply dropped their prices temporarily to secure their share of that "increased demand".

Next, you'll be saying that they are seeking to take over smaller competitors (and product segments) in order to increase their level of vertical integration in the market, and that the Commerce Commission is actively looking into the situation.

https://insideretail.co.nz/2022/06/1...ce-commission/

[R650R]

I see the propoganda machine has a slick new ad.... instead of the traditional political party ad of showing a happy family enjoying life it’s looking at a phone on a desk with various text updates showing alledhed success etc.... how appropriate to her target audience.....

[pete376403]

I see the propoganda machine has a slick new ad.... instead of the traditional political party ad of showing a happy family enjoying life it’s looking at a phone on a desk with various text updates showing alledhed success etc.... how appropriate to her target audience.....

What is wrong with an ad targeting a particular market segment - any ad agency worth its salt will do this all the time. For example, you are probably the target market for funeral insurance, retirement villages, Viagra, incontinence products, Suzuki Swifts and so on. The Labour party or its agency has probably decided there is no point on wasting advertising spend on old bitter homophobic /anti LGBT truck drivers..