A stupid, stupid man

April 17, 2014

Think about Labour policy announcements this year and what comes to mind?

Debacles.

Wrong figures, wrong impressions, wrong strategy.

The latest is what has been dubbed a clustertruck – the proposal to restrict trucks to the slow lanes of three and four-lane highways.

Truck drivers said preventing them from using the outside lane on three- and four-lane highways would be unworkable and unlikely to reduce congestion.

The Automobile Association (AA) also questioned the policy, saying its members had never cited trucks as a cause of congestion. . .

Then there’s another problem with the transport policy:

Transport Minister Gerry Brownlee says Labour leader David Cunliffe has got himself in the most astonishing predicament on TV3’s Firstline this morning, by claiming the National Land Transport Fund is “going to be in surplus very soon,” so it’s time to give some of it back to taxpayers.

“We know Mr Cunliffe is under significant pressure from his own caucus, having announced policy on the hoof yesterday without telling the team back at Labour’s war room,” Mr Brownlee says.

“Now, when asked by the media this morning to explain where the forgone revenue from this policy would come from, Mr Cunliffe has resorted to making things up, presumably thinking no one would call him on it.

“The fact of the matter is the National Land Transport Fund is by its very nature incapable of achieving a surplus, or a deficit – it is what it is.

“This is an ongoing fund which is used to fund the National Land Transport Programme, which for the years 2012-2015 will see $12.3 billion invested in road building, road maintenance, public transport, and which includes $300 million a year for targeted on-road Police enforcement.

“The fund might be above or below forecast at any point in time due to factors like the performance of the domestic economy, or fuel prices, but this is a dedicated fund, with all its money coming from Road User Charges and Fuel Excise Duty on an annual basis.

“All of that money is spent on New Zealand’s roads and public transport through the National Land Transport Programme; the question of surplus or deficit simply never arises.

“What’s more, thanks to changes in driver behaviour – in particular more efficient use of vehicles by large transport fleets using GPS technology – and increasingly fuel efficient vehicles, there has been greater financial pressure on the National Land Transport Fund in recent years, not less.

“Despite that, over the past six years this government has invested more in our land transport system, following a sustained period of under investment, and that’s just starting to pay off for all New Zealanders.

“We know this is increasingly difficult territory for Labour.  They don’t want to talk about building roads because they don’t want to offend their Green coalition partners.

“But if Mr Cunliffe believes there is a surplus to be had in the National Land Transport Fund, he needs to explain what bits of the fund’s programme he is going to cut.

“If there’s some mystical way of creating a surplus inside the National Land Transport Fund without cancelling planned investment, David Cunliffe needs to tell us.

“I’d love to know what document he has seen that suggests this fund has, or will soon have, more money than it needs.”

Paul Henry says it all:


To be seen or not to be seen

April 16, 2014

Campbell Live wanted to do a series on party leaders at home.

It is the sort of publicity politicians can’t buy and an opportunity to show voters the people behind the politics.

John Key was first up last week.

Peter Dunne and Winston Peters declined to take part.

David Cunliffe was scheduled for Monday evening this week  but he pulled out.

. . . Mr Cunliffe has also cancelled an invitation for a second time to have television cameras in his home for an election year leaders series. Mr Parker says Mr Cunliffe has a young family and a right to privacy. . .

His family does have a right to privacy but if last week’s session at home with the Keys was anything to go by, there would have been no need for the family to be involved.

It is much more likely he doesn’t want people to see he doesn’t live in a modest house, in a modest suburb.

The family was a silly excuse and his decision an error of judgement similar to turning down the invitation for a weekly interview on the Farming Show.

It has been compounded by his not turning up in parliament at Question Time, choosing to address some business leaders instead.

We’re not hearing him on the Farming Show, we’re not see him on TV and we’re not seeing him in the House yet only last week he was complaining because he wasn’t going to be seen enough with the Royals.

Does he want to be seen and heard or doesn’t he?


Howling at the moon

April 16, 2014

Security staff, alerted to a disturbance at parliament last night, discovered opposition leader David Cunliffe howling at the moon.

Chief security officer Ian Sure said at first all they could make out was repeated cries of “It’s not fair”.

“Then he started crying and shouting. It was difficult to make out what he was saying at first, but then we realised he was cursing Gaia.

“One of our officers asked if he wanted to speak to one of the Green MPs, being as they seem to know a bit about that sort of thing but that just made it worse.

“He said it wasn’t fair, the grass is green, the bush is green, the sea and sky are lakes are blue all day, every day but the one night there’s a bit of red in nature with a blood moon, the clouds cover it.

“He kept shouting and saying all he wanted was a photo op. He said that the National and the Greens got nature showing their colours every day and all he wanted was his fair share.”

Mr Sure said his staff let him cry himself out then they took him inside for a cup of tea and a lie down.

 

 

 

 


Property speculators pay CGT

April 13, 2014

Labour leader David Cunliffe says it’s ‘lunacy’ that property speculators get tax free capital gain.

But they don’t.

Buying and selling properties as a business, which is what speculators do, attracts a capital gains tax.

Hon BILL ENGLISH (Minister of Finance) : The Government already taxes capital gains on property speculation where property investment is for the purpose of trading. The member may not be aware of that. In addition to this, the Government’s 2010 tax changes on property disallowed deductions for building depreciation, and this raises around $700 million per year from property investors, a much larger number than any estimate we have seen for the foreseeable future for a further extension of the capital gains tax. Further extension of the current tax on capital gains is likely to have high compliance costs, and that is a conclusion that three tax inquiries and several Governments have come to over the last 20 years. If it excludes the family home, it will not raise much difference, it will not raise much revenue, and it becomes effectively a tax on successful businesses. In overseas jurisdictions, it has not improved housing affordability.

Hon David Parker: Why does he think the profits on the sale of investment property are of such critical importance to the economy that they should not be taxed but, instead, be cross-subsidised by every other taxpaying business and worker in New Zealand?

Hon BILL ENGLISH: I would point out two things, as I pointed out in the primary answer. First, where any property is bought for the purposes of selling, the gains on that are taxed at current income tax rates. It is called an income tax, but, actually, it is a capital gains tax on trading investment property. The member may have seen recent publicity about the scope of the Inland Revenue Department’s activities in ensuring that everyone who does trade in property pays full income tax rates, not the half-baked rate that he proposes in his proposition of 15c in the dollar. They are, actually, taxed at 33c currently. Secondly, the changes made in the 2010 tax package do collect $700 million per year from property investors, which is a much larger number than any revenue that he has posited as a result of his partial extension of the current capital gains tax.

Labour’s policy is built on the lie that we don’t have a CGT.

We do, at 33 cents in the dollar, more than twice the rate Labour is proposing – unless of course they’re going to tax it twice which is quite possible with them.

Jami-Lee Ross: In considering various tax options for New Zealand, what international evidence has the Minister seen on the effects of capital gains taxes on housing affordability?

Hon BILL ENGLISH: I have seen reports from Australia on the effects of a partial capital gains tax, limits on foreign investment, a so-called mansion tax, and compulsory savings. If these policies are meant to improve housing affordability, then they have not, because housing affordability is worse in Australia than in New Zealand. Just today there is a report being published showing that first-home buyers now make up the smallest proportion of the housing market ever in Australia. So the housing market in Australia now consists of fewer first-home buyers than ever, so we would be a bit careful about following that policy prescription.

Hon David Parker: What proportion of investment property sales pay tax as traders; is it closer to zero percent than 100 percent?

Hon BILL ENGLISH: I do not have that information to hand, but I can assure the member that the Inland Revenue Department is vigorously pursuing every investor who trades in property.

Jami-Lee Ross: What reports has the Minister received on the case for a new capital gains tax in New Zealand?

Hon BILL ENGLISH: I have received the report of a speech to the Wellington Property Investors Association in July 2005. It noted that the Government-appointed tax review in 2001 considered a new capital gains tax and concluded that the disadvantages of such a tax—its complexity and costs—outweighed the theoretical benefits, so it did not recommend such a tax. The speech also noted that the Government of the day agreed with that conclusion that the status quo was entirely adequate. The speech was delivered on behalf of the Minister of Finance Michael Cullen by his associate David Cunliffe. . . .

What’s changed since Cunliffe delivered that speech?

None of the facts, just the politics.


Purpose of schools is education

April 13, 2014

Phillipstown School took the government to court and won.

The lengthy process over whether or not it was to merge with neighbouring Woolston School had to be gone through again and the same concussion was reached.

It was in the best interests of the schools, and the taxpayers who fund them, to merge.

The principal hasn’t accepted that:

. . . Phillipstown School principal Tony Simpson said the school would be consulting lawyers over next steps.

The process had been flawed and stressful leaving him feeling “at times bullied”.

He said he not had a satisfactory response from the Ministry as to why the school was the one to close and looked forward to the release of an Ombudsman report into the schools’ reshuffle.

“The public of New Zealand have not been presented with all the facts.” .

The public have their own lives and concerns. If they have any about this it will be that what is in the best outcome for the children and the best use of public money.

With that in mind and without the emotion of those closely involved, the Ministry’s decision is right.

People closer to the action share that view.

The grapevine tells me that other schools in Christchurch have lost patience with Phillipstown and resent the money and energy the Ministry has to expend on this fight when it could be directed more positively elsewhere.

However, Simpson said his main priority was the children. “We’ve got to make sure the children are catered for.” . .

That won’t be achieved by more legal action and delaying tactics.

Board chairwoman Alicia Ward said the school was “not dead yet” and would fight to the death.

Without the school the community risked “fizzing and dying” she said. . .

Schools do form a hub for communities but that isn’t their purpose. It’s to educate children.

That will happen at the Woolston site where $11.8 million is to be spent on development and the community can be involved in that.

Schools leaders have wasted far too much money and time fighting the inevitable already, it’s time for them to stop the emoting and, as Tahu Potiki writes,  start leading:

Dear Phillipstown School, please get a grip. Fight to the death? Really?

I can understand that a decision such as a school closing is an emotional one and pushes buttons at a number of levels but, as an outsider, I have to say that the appearance of the key players advocating for the school is petulant, irrational and pointless.

We have kids that attend a local school and it does play an important part in our community but we are predicting changes some time in the near future. There are three schools between here and Dunedin and only about 300 pupils with the spread being far from even. We have always expected that the ministry will eventually step in and make a call. When it does I certainly hope our communities will act with a little more balance and perspective than we have seen from Phillipstown.

The Minister of Education does not have a bottomless pit of money to simply let schools with diminishing rolls and depreciating assets carry on existing regardless. There are serious responsibilities to take in to consideration as post-earthquake Christchurch reconstructs and reconfigures and all the social institutions and community infrastructure clearly need to reposition themselves.

There are a few things that flabbergast me about this reasonably minor storm in a teacup.

Firstly the fact that Mai Chen has been engaged again for further court action. I have worked with Mai before and she is certainly a force to be reckoned with and I rate her highly but she does not come without a cost. . .

The second thing is that the ministry is proposing that the new school the Phillipstown children would be relocated to would benefit from an $11.3 million investment. This is a glorious opportunity and I would have expected community leaders to be working furiously to have some influence over how that investment might work in the best interests of the newly configured school. I would not have expected a complete denial that an investment of this magnitude is a huge opportunity. . .

Thirdly it has been very disappointing to see the Labour Party playing politics and attempting to manipulate emotions. If they really have said that they would keep the school open then they have dropped pretty low in my estimation.

David Cunliffe is already looking like a desperate character after his comments on the royal tour but this is, quite frankly, adding to the embarrassment. It has the appearance of vote buying without any of the analysis and objective assessment of the community’s situation. They may as well be promising a $100 increase in the dole for all the unemployed that vote for Labour. Ultimately it cannot be delivered.

This is cynical and unprincipled vote buying in one small area that will lose far more in others who know there are far better ways to spend scarce public money.

Fourthly it is highly questionable in terms of role modelling. Trotting your kids out to cry in front of the cameras to make your point makes me wince. A group of parents that weren’t moaning about dumb people making dumb decisions may well have aided their transition in a much more positive fashion. Instead the children have been drawn in to dramatics and will experience a degree of trauma that could probably have been avoided.

Children take their lead from adults. they have been let down by those who should be showing leadership.

Finally, community is much more than a school. If there is a collective view that the community will die because the school has been merged with a boost of $11m then there are some seriously confused people in that community. Real community will be looking for opportunity and growth. Instead the blinkers are on and one has to question the sincerity of those in key roles and their agenda. I do wonder if the principal lives in Phillipstown or if his personal residence is in some other suburb. . .

It’s time for the adults to act like grown-ups, take some deep breaths and do what’s best for the children.

That’s accept the decision and work to ensure the transition to the new school is as seamless as possible.

 

 

 


If Peters is preferable . . .

April 12, 2014

John Armstrong forecasts storms ahead for the left:

Having turned its caucus room in Parliament Buildings into a war room staffed almost around the clock by policy wonks, political strategists, experts in social media, plus assorted press secretaries – all in readiness for the coming general election – the Labour Party may find itself with another war on its hands before then. Or something close to it.

The “enemy” on this occasion will not be National. Neither will it be Act. Nor United Future. Nor Colin Craig’s Conservatives. Nor even Kim Dotcom and his Internet Party.

No, this war will be of the internecine variety where the combatants all come from the same neck of the (political) woods.

It will have been sparked by the seemingly endless positioning and posturing ahead of September’s election which will count for little in the aftermath. But this week it all turned ugly for the Greens. And things may yet get uglier still.

It may be that fate has decreed that the power struggle between Labour and the Greens takes centre stage at the worst possible time for the centre-left.

It may not come to open warfare. But the dismissive, almost contemptuous attitude displayed by David Cunliffe with regard to a supposed ally is bound to rankle deeply wherever Green Party members gather.

You can be assured there will be a response; that there will no longer be any scruples about upstaging Labour on the hustings. . .

For all MMP is supposed to be about consensus it is first about competition and then compromise.

Labour has set up a war room and it is aiming not just at National but potential allies with whom it is in competition for votes and the biggest of those is the Green Party.

In-fighting and lack of traction by Labour has enabled the Greens to stake out territory as the de facto leading opposition party.

Labour has more MPs and is a bigger party, but it isn’t getting enough support to be a strong leader in a coalition.

The weaker it is, the stronger the Greens will be and that poses a dilemma for Labour. A stronger Green Party isn’t at all attractive to  voters in the centre. The more power the Greens are likely to have the less attractive a Labour-led government becomes to many in the centre who will be much more likely to move a bit right to National than leap left to Labour.

Labour knows it has to grow the left block, but it also knows this will be harder with a strong Green Party which is why it is doing its best to keep its distance.

Labour’s failure to take the initiative must have made the Greens suspicious. So they approached Labour with a proposal for both parties to co-operate to a much greater extent in the run-up to the election and “brand” themselves as the Government-in-waiting.

What the Greens were really doing was testing the extent of Labour’s commitment to working with them in government following signs that Cunliffe was wavering on that question.

The Greens got their answer soon enough. It was not what they wanted to hear. They got a lecture in semantics – that the next Government would be a “Labour-led” one, not a “Labour-Greens coalition” – and a lesson in history – that Labour had been the dominant party on the centre-left for the past 100 years and thus called the shots as of right.

Cunliffe made it patently clear in word – and more so in tone – that Labour was decoupling itself from the Greens and would be seeking to “maximise its share of the vote” – code for saying it was now open season on territory occupied by the Greens.

Neither could Cunliffe muster much enthusiasm when asked to digress on how Labour would treat the Greens in any post-election negotiations.

Of course, Cunliffe’s remarks were for targeted at an audience of one – Winston Peters. Cunliffe knows he will likely need both New Zealand First and the Greens to make it to the swearing-in of a new Government. But it is Peters’ chalk to the Greens’ cheese. It is Cunliffe’s conundrum.

Peters has choices. The quickest way to have him running helter-skelter towards National’s camp would be for Labour to get tied down in some pre-election arrangement with the Greens.

The Greens are consequently expendable. But for how long? Cunliffe is clearly taking things step-by-step, conscious that the voters might solve his problem. Or compound it.

But Labour’s antipathy cuts deep. Labour does not trust the Greens and believes that party is seeking to supplant it. . .

If Labour doesn’t trust a potential coalition partner it can’t expect voters to either.

The net result of this week’s wrangling is to reduce the centre-left’s share even more. The message most voters would have picked up is that Labour no longer wanted to work with the Greens. Voters hate disunity and punish accordingly.

The Greens deserved better. They are not responsible for Peters’ existence. Cunliffe could have been less dismissive and more accommodating in his language.

He could have accepted a much more limited pre-election understanding. Something symbolic, like Jim Anderton’s invitation to Helen Clark to speak at the Alliance’s conference a year before the 1999 election.

Key likes to wind Peters up; Cunliffe risks looking like he is being cowered by the veteran politician.

Labour’s pursuit of power dictates, however, that Labour be hostage to Peters for the next five months despite knowing such obedience will not make even the tiniest bit of difference as to whether he ultimately favours the centre-right or centre-left. . .

Labour is competing with the Greens to keep its vote strong and is signalling if it has to make comprises it would prefer to do so with Winston Peters.

Peters will be enjoying that. However, if he’s the more preferred partner for Labour it speaks volumes about how little the party thinks of the Greens.


Leaders lead but do followers follow?

April 11, 2014

David Cunliffe declared that a pre-election coalition between Labour and the Green Party was not going to be an option.

But was that the decision of his caucus or just his own?

The second tweet has a recording of David Parker saying that the decision was that of the leadership group but when asked to clarify that he suggests it was Cunliffe’s because “leaders lead”.

Leaders do lead but followers don’t always follow.

A caucus with a majority which didn’t consider Cunliffe their first choice as leader is quite likely to give less than its wholehearted support to any initiatives he takes.

Whether or not they do it’s yet another story which shows Labour hasn’t got its own act together and is, therefore, still not ready for government.


Greens spurned by Labour

April 10, 2014

Labour has spurned Green Party overtures to form a pre-election coalition.

ONE News has learnt the Green Party proposed a formal coalition with Labour to contest this year’s election but Labour MPs rejected it.

The proposal called on the two parties to campaign together and brand themselves as a future Labour/Greens Government. The proposal also wanted a divvy up of cabinet positions in proportion to the number of seats won.

It also called for a strategy on how the parties could work with New Zealand First.

“Some specific ideas that were put forward by the Greens did not find favour on our side…that’s a fair statement,” Labour Leader David Cunliffe told ONE News. . . .

Rejecting Green advances was Labour’s best option.

Most swinging voters in the centre aren’t enamoured of the Greens.

Any support Labour gained from the left with a pre-election coalition would be more than lost by the number of voters that prospect would have been scared away from the centre.

But Labour’s still got a problem.

It doesn’t want to govern with the Greens but could well find it difficult, if not impossible, to govern without them.

Whether they’re in a pre-election coalition or not, the prospect of the radical left policies a red-green government would implement isn’t at all attractive to undecided moderates.

 


Any publicity . . .

April 8, 2014

Labour leader David Cunliffe has been struggling to be heard above the noise of the Dotcomana dalliance but finally he’s got some attention:

Labour leader David Cunliffe has taken a swipe at John Key over the royal visit, suggesting the prime minister is milking the extra “facetime” with Prince William and his wife, compared with his own limited meetings.

He also described a possible visit to the White House as “pre-election PR from the prime minister ” who was “stage managing the calendar of the year as it suits him”.

But he conceded “it may not be the first time prime ministers have stage managed international visits”.

Cunliffe said it was very  important that the treatment of the royal visit was as even-handed as possible between the government and the opposition, and also that the visit was well-spaced from the election.

The split between the government and the opposition should be as even as possible – but it wasn’t, he said.

Labour was positive about the visit of the Duke and Duchess of Cambridge and they were very welcome in New Zealand.

“We are not going to play politics with it,” Cunliffe said. He would  “leave it for New Zealanders to decide” if there was sufficient gap between their visit and the election.

Apart from a one-on-one meeting with Prince William, Labour would be part of only one other event, a trip to Blenheim on Wednesday.

Cunliffe repeated he would let the people of New Zealand draw their own conclusion if that was fair or if he was getting enough “facetime”.

Any publicity isn’t good publicity.

Cunliffe sounds like a child with his nose out of joint because an older sibling is getting more attention.

It also shows a warped view of what matters to and influences voters.

Key said that he would not be at the “vast, overwhelming” number of events on the royal visit schedule and did not believe he was milking the event.

“I don’t actually think anyone’s going to vote National, Labour or any other political party because we’re seen standing next to the royals when they’re in New Zealand,” Key said.

“They vote on the economy, law and order, health and education. As soon as David Cunliffe starts talking about that and not this sort of rubbish, he might do a little bit better.”

Quite.

If Cunliffe really thinks someone who’s going to notice who’s spending time with the Duke and Duchess in April will let that influence their vote in September, he’s needs to get out more.

Political tragics might be interested in the election now but few others I’ve spoken to recently are remotely interested.

When, and if, they start thinking about it the royal visit is very unlikely to be a factor.


Political playground

April 8, 2014

Trans Tasman takes politicians back to school:

Hone Harawira, one suspects, used to specialise in Chinese burns and other playground tortures when he was at school. The Mana Party leader has the kind of air about him redolent of such schoolyard antics. John Key was probably the cheeky kid who cracked enough jokes to be popular with the other kids but who nevertheless did his homework assiduously and kept on authority’s good side. David Cunliffe was the greasy goody two shoes, bright, geeky and probably a bit of a sneak. Peter Dunne – swotty pants. Russel Norman – ditto, but a more argumentative version of the same. Metiria Turei: the slightly flaky party girl (a bit like Paula Bennett, in fact).

We had classic playground diversion stuff this week when it was suggested Harawira is the lone electorate MP Kim Dotcom has signed up to his party. It’s not me, sir, Harawira protested – pointing indignantly to the class swot Peter Dunne sitting quietly in the corner. Key of course has rubbished the idea his support partner might be in talks with the Internet pirate who has promised to bring the Prime Minister down. “Not a dog show,” the PM laughed, which prompted a few to remember the Country Calender spoof about the remote controlled sheep dogs, and to ponder Dunne’s resemblance to a slightly affronted Scottish Rough Collie.

Former Labour leader David Shearer – the decent kid  everyone used to pick on – is the other candidate who has been suggested, but this looks even less likely than Dunne. Dotcom has historically held a somewhat awkward relationship with the truth which has occasionally brought him to the attention of the authorities. This looks like another of those occasions. . .

An awkward relationship with the truth, may or may not apply to the 2000 members his Internet Party claims to have.

It’s applied to register as a political party.

. . . Following registration the Internet Party will need to submit its rules providing for the democratic participation of members and candidate selection within the time period specified by law. . .

It’s constitution is here but Russell Brown raises questions on whether they allow for democratic participation by members:

1. There is a special role called ‘party visionary.’ This is defined as Kim Dotcom, or a person selected by Kim Dotcom. THis visionary has the automatic right to sit and vote on the party’s executive and policy committee and cannot be kicked out by the membership.
2. To stand for election to the party’s executive, in addition to being nominated by current members of the party you’ve got to be nominated by a current member of the National Executive. This locks in the incumbents.
3. The party’s executive has nearly unfettered control over the list: they put together an initial list, send it out to the membership to vote on, and then they ultimately decide what the final list should be having regard to the member’s choices.
4. The national executive chooses who stands in what electorate. No local member input at all.
5. The party secretary has a very important role (eg they get to solely arbitrate over disputes; they set out the process for amending the constitution, they decide the process for electing office holders; they’re a voting member of the National Executive). The only problem is they’re legally an employee of the party’s shell company, meaning that it is very hard for the members to exercise democratic control over the secretary (you can’t just fire an employee).
6. On a related note: the way the Internet Party is structured is so all its assets are kept in a shell company (Internet Party Assets Inc), away from the party itself. I don’t know what the purpose of this one was TBH. (the rules of this company were meant to be attached to the constitution in a schedule, but as far as I can see they’re not there)
7. They’re using the old ‘vote in Parliamentary caucus’ decides leader method. To be fair, most parties use this though. There is a bit of a quirk though that until we know their list we don’t know who their party leader is, because if they’re outside of Parliament their party leader is just whoever is at number 1 of the list. (I also note there’s no way to remove a leader if they don’t have representation in Parliament).”

Not so much of, for and by the members as of, for and by Dotcom.

But the silver lining to the Dotcom cloud is that every bit of media attention he’s getting – and he’s getting a lot – is less for the rest of the opposition.


Prove it

April 7, 2014

Act leader Jamie White is challenging David Cunliffe to prove he’d be better at investing money than the private sector.

The Labour Party has announced a return to “industrial policy”. If elected, they will decide which businesses and sectors of the economy will deliver the highest returns and promote them in various ways – most obviously, by subsidising them with taxpayers’ money.

This policy effectively replaces the decisions of private investors with the decisions of Labour Party politicians. It would be a foolish policy if Labour Party politicians were not better investors than the private investors they will replace.

So, before asking people to vote for the policy, shouldn’t David Cunliffe prove that he and his colleagues really are better investors than those who do it professionally?

He could do this easily. Mr Cunliffe could set up a small investment fund – $5,000 would suffice to get started – and trade it in the months before the election. Since he claims to know better than private investors which businesses will give the best returns, his fund should massively outperform the NZX 50 and other stock market indices. . .

Mr Cunliffe talks a good game when it comes to investing. And he plans to put your money where his mouth is. But before anyone goes along with him, they should insist that he puts his own money where his mouth is.

So I challenge Mr Cunliffe. Trade the stock market in the months before the election. Publish your trades as you make them and explain how you arrived at your supposed knowledge of which investments are best. By the election we will be able to see if you really do know what you claim to.

If you won’t accept the challenge, then withdraw your proposal to use taxpayers’ money to invest in the businesses that take your fancy.

A defining feature of the National-led government since 2008 is a respect for public money because they understand it’s other people’s.

That has yet to penetrate the we-know-better fog which envelopes the left, all of whom are concentrating on how they’ll divide the national pie rather than working on how to make it bigger.


Farming Show says no to Cunliffe

April 3, 2014

The Farming Show has interviewed the leaders of the National and labour parties each week for years.

When Jamie Mackay offered the spot to David Cunliffe he turned it down and Jamie wasn’t impressed.

Cunliffe has now had second thoughts:

CALLER PETER:   Good morning, Mr Cunliffe.
DAVID CUNLIFFE:             Morning.
CALLER PETER:   I was just wondering if you could explain why you’ve refused to appear on the Farming Show.
DAVID CUNLIFFE:             Actually, you know what? I’ll make an offer to you today. I’m happy to do that. I’ve changed my mind.
TIM FOOKES:     Why did you say no, though? This is…
DAVID CUNLIFFE:             Because I was told before I became leader that the particular show used to ridicule my predecessor in a way that was grossly unfair. Now, that may or may not be true, but that’s what I was told. I accepted that advice, and I declined to appear. This is…
CALLER PETER:   Russel Norman appears on it.
DAVID CUNLIFFE:             Yes, and I’ll tell you what, I’m making a commitment today: if I get a call from Jamie Mackay, invite me on, I’ll do it. There you go.
TIM FOOKES:     There you go, Peter. Look, the problem is, if you’ve said no, do you expect Jamie Mackay to come knocking on your door and saying, look, if you’ve now said yes, will you come back?
DAVID CUNLIFFE:             It’s a good offer. It’s up to him. Doesn’t worry me either way.
TIM FOOKES:     I mean, this is the thing – and I was very surprised when you said no, or when your office said no, because you need, it appears, to get out there and to get among people, especially farmers and people who want – you know, want a bit of a…
DAVID CUNLIFFE:             Yes, look, believe it or not, I actually kind of like farming. I grew up in a farming district, South Canterbury. I spent a year working on a shearing gang and on a cropping farm. And I got dirt under my fingernails. In fact, I spent a fair while mucking out pigpens as well, but that’s another story. Oh, I could tell you some stories about pigpens. But I won’t.

Mackay is a professional.

He sometimes asks tough questions and he is sometimes irreverent but I have never heard him treat a politician unfairly.

Cunliffe obviously realises he made a mistake and has had second thoughts but the Farming Show host has not.

Everyone makes mistakes and this one has come back to bite Cunliffe.

He’s missed an opportunity to speak to provincial New Zealand – and city people who tune into Radio Sport from 12 -1pm.

But worse for him, in the interests of balance and on the advice of Damien O’Connor, Mackay already invited Shane Jones to appear.


It is about trust

April 1, 2014

The latest poll shows trust matters to voters.

David Cunliffe’s problems with the trust he used to hide donations has turned off voters.

In the latest 3 News-Reid Research poll, when asked if his actions were worthy of a Prime Minister, 65 percent of voters, almost two-thirds, said “no”, while only 27 percent said “yes”. . .

Kiwiblog shows support for most opposition leaders goes up after they’re elected but Cunilffe’s trend has been all down hill.
Given he’s been caught faking his CV, bungling policy announcements, using a trust and then trying to say he wasn’t wealthy, this is no more than he deserves.

Help this, hurt that

March 25, 2014

Richard Prebble points out that by trying to help the wood sector, Labour will be hurting others:

“Forestry and Wood Products: Economic Upgrade” is a boring title for a policy. We have a new title “Only Maori can apply”. See, you are already interested. (We are not making this up. Labour proposes a tree planting programme costing $20 million a year that is only open to Iwi).

Anti-New Zealand Steel ?

“Labour is pro-wood” says David Cunliffe. Boring! Why not say “Labour is anti-steel framed houses?” Now we want to know why. Does Cunliffe know that much of the steel framing for housing around the world is made in computer driven mills invented and manufactured in New Zealand? New Zealand has three steel frame mill makers and they dominate the world market. The steel used in New Zealand buildings is manufactured in this country too.

More leaks

Labour could have got far more coverage for their forestry policy by saying it is Labour policy to force up the cost of home building. If the country had used more steel framing the leaky homes scandal would have cost less. Steel framed homes are now being exported to the islands because they are easier to erect and have less maintenance issues. But surely what material you use should be your choice ?

Policies have consequences

The biggest loser from the leaky building scandal is the Ministry of Education. It is going to cost taxpayers tens of millions of dollars to fix all the leaky schools. The fault is not the use of wood but a government policy to accept the lowest tender. The worst leaky schools were designed by the same cheap architect. Requiring all government building four stories or less to be built of wood will have unintended consequences like a five storey school because it is cheaper to build.

Increased petrol prices

Buried in Labour’s “pro wood” policies is a proposal that companies needing to buy offsetting carbon credits must purchase 50% of their carbon credits from New Zealand forestry owners. It is called global warming for a reason. A New Zealand carbon credit is no better for the environment. Labour admits New Zealand forestry owners will increase the price of ETAs but then say “COST: This measure will be revenue-creating rather than a net expenditure”. That is like saying a tax increase has no cost because it raises government money!

Some goss

Where does this nonsense come from? The transfer of the Central North Island forests to iwi has made Maori the nation’s biggest forest owners. A new generation of Maori leaders whole work experience has been that wealth comes from the government. How to increase the value of their forests? Get the government to change the rules to force the country to use wood. Iwi have lobbied Shane Jones who has been the driver of this potentially multi-million dollar gravy train. . .

Whether or not the pro-wood policy would benefit for any group, Maori or not, is not the problem.

It is that it would benefit the wood sector at the expense of others.

It’s not just the steel industry which is upset about Labour’s favouritism, the concrete industry is too:

Labour’s “pro-wood” government procurement strategy will create an inappropriate commercial advantage for one construction sector over another, according to the New Zealand cement and concrete industries.

Announced today by David Cunliffe at the ForestWood conference in Wellington, the policy would mandate that “all government-funded project proposals for new buildings up to four storeys high shall require a build-in-wood option at the initial concept / request-for-proposals stage (with indicative sketches and price estimates).”

Rob Gaimster, CEO of the Cement & Concrete Association of New Zealand (CCANZ), believes that policies which appear to be giving preferential treatment to one construction material are misguided.

“It is inappropriate to mandate that those designing new government buildings consider wood as a structural option, and then require an explanation if an alternative material is chosen,” says Mr Gaimster.

“Government should not be picking winners when it comes to the selection of construction materials, which should stand or fall on their own technical, cost, aesthetic and sustainability credentials.

“In addition, the policy does a huge dis-service to the hardworking men and women in the cement and concrete industries. Favouring a single construction material during the design phase of a new government building could seriously impact on their livelihoods and jobs.

“This policy does not create a level playing field for the use of construction materials in government buildings. In fact, materials other than wood will be considerably disadvantaged.

“We are concerned about the wide-reaching implications of this policy and believe it should in no circumstances be adopted.”

 

Out climate makes it easy to grow wood and we produce a lot of it.

Adding value to it would create jobs and that would be good if that’s what domestic and markets wanted, at the price they’re prepared to pay.

Getting the government involved to favour wood at the expense of other materials, especially those with a significant local input, is expensive, misguided and unfair.


Forgetting or ignoring?

March 24, 2014

More headless chookery from Labour:

New Zealand’s interest rates are among the highest in the world and homeowners that are bearing the brunt of them should join Labour’s call for an Economic Upgrade, Labour Leader David Cunliffe says.

“New Zealand mortgage rates are higher than Australia and much of the developed world. That’s because our economy is not paying its way in the world and has major issues that need to be fixed. . .

Any difference in interest rates is a sign of the health of our economies. New Zealand’s is doing better than Australia’s.

That does present us with the threat of inflation which the Reserve Bank has a duty to keep under control.

That’s why the Official Cash Rate eased up from months at an historic low to 2.75 percent last week.

That’s no reason for Cunliffe to run round pretending the sky is falling.

Has he forgotten that people were paying around 11% on mortgages when the government in which he was a minister lost power in 2008?

Has he forgotten that one of the reasons for that was the high taxing, high spending policies of his government?

If he isn’t forgetting that then he’s ignoring the lessons from that and his own education which would be worse.

But that would explain why he’s peddling the unfortunately similar prescription of more tax, more churn, more spending which is what Labour policies announced so far threaten.


Software to blame

March 23, 2014

The NBR’s In Tray (not on-line) has identified a software problem:

Stung by surveys showing ongoing popular resistance to its new brand, the blue-collar chip software company Labour is understood to be mulling a re-launch of its recently unveiled product. Since the Leadership3, unpopularly known as Cunliffe, appeared on the market last year, consumers focus groups drawn from across the board have shown marked resistance to the Cunliffe package with one recent survey showing that fewer than one in three consumers would buy the item if it were offered in its current condition this year. A marketing campaign headed by Mattski & Associates, has suggested a number of fresh priorities for the brand, including a new name (CunLife, “emphasising new energy, new direction, new donations”), a gruelling schedule of presentations to business seminars and the possibility of a guest appearance as a sports anchor at the next major All Blacks fixture at the [cont'd]

If that’s the case does the party need a reboot or a whole new programme?


Lies, damned lies and . . .

March 22, 2014

I used to chair a trust which supported people with intellectual disabilities and their families.

Most of our funding came through government agencies and it was precarious.

We knew that we were competing with other providers and if we ours wasn’t the best proposal someone else would get the funds.

That happens all the times, and not just with government agencies.

The Problem Gambling Foundation has found that out and isn’t happy about it and has Labour’s support for that:

Labour says funding for the Problem Gambling Foundation has been stopped because the foundation opposed the deal to increase the number of gambling machines at SkyCity Casino.

That doesn’t sound good but the very next paragraph makes it better:

But the Government has confirmed the new holder of the contract to provide health and counselling services for problem gamblers throughout New Zealand is the Salvation Army, which also opposed the SkyCity deal.

That didn’t stop Labour blaming the government:

Labour’s Internal Affairs Spokesman Trevor Mallard said the foundation was being forced to close its doors because it vocally opposed the deal between the Government and SkyCity to increase the number of pokies in the Auckland casino, in return for building a new national convention centre. . .

This would be the same Mallard who was a guest of Sky City at the Rugby World Cup.

That was then, back to now:

Mallard said the foundation was the largest provider of problem-gambling services in Australasia and “it is hard to imagine a more qualified organisation to do this work”.

The funding decision was based on far stronger grounds than Mallard’s imagination.

Health Ministry group manager Rod Bartling said negotiations were still ongoing, but the tender process was fair and independently assessed.

“The ministry can confirm that it has informed the Problem Gambling Foundation that it does not intend to renew its national contract to prevent and reduce gambling harm,” he said.

“The process to re-tender the contracts for these services was an open contestable tender process.

“The evaluation panel deciding on the tender comprised six members – three internal ministry staff and three external evaluators from the Department of Internal Affairs, the Health Promotion Agency and a Pacific health consultant.

“The ministry also asked Pricewaterhouse to independently review the procurement process and this confirmed the ministry’s processes followed accepted good practice.”

Associate Health Minister Peter Dunne was even stronger in refuting the claims  that the PGF lost funding  due to political pressure.

“The Ministry of Health clearly signalled in 2012 that it would go to the market for the provision of gambling harm minimisation services during its public consultation on this issue, and this is the outcome of that process”, says Mr Dunne.

“This review had been on the cards for some years prior to this, as the development of the sector has to a large extent been undertaken in an ad hoc manner, with duplication of services from national providers simply not achieving best value for money that clients of services are entitled to expect.”

The process to retender the contracts for these services was an open contestable tender.   The evaluation panel deciding on the tender comprised six members: three internal Ministry staff and three external evaluators from the Department of Internal Affairs, the Health Promotion Agency and a Pacific health consultant.  

“The Ministry of Health has been particularly mindful to keep the process clearly separate from any perception of political interference. This extended to commissioning an independent review by Pricewaterhouse on its proposed decisions and I congratulate them on the rigorous commitment to probity they have shown in following this tender process as it went beyond the requirements of best practice”.

“The outcome is that services are more streamlined and will achieve increased service provision from government funding in the gambling harm minimisation area. The Problem Gambling Foundation will continue to be contracted to provide specialist services, if negotiations with them are successful, says Mr Dunne.

It is proposed that the major national provider will be the Salvation Army’s Oasis service, which already provides gambling harm and other addiction and social services across the country.

“I am aware that the Salvation Army has been critical of the government in certain areas over the years, including the SkyCity convention centre, but I see no reason why this should prevent them from being contracted to provide the excellent services that they do.

“For Labour and the Greens to say that the Problem Gambling Foundation’s funding has been cut because of its opposition to particular government policies is patent nonsense. It was not until that process was completed that I was advised of the outcome.

“Just because they have Problem Gambling in their title, doesn’t mean they become a default provider, and I commend the Ministry for its rigorous process and decision making which will ultimately benefit those New Zealanders who may who experience negative outcomes from their, or others, gambling activities”, says Mr Dunne.

The PGF lost funding because the Salvation Army, which was also critical of the Sky City convention centre, convinced the evaluation panel, backed by an independent review by Pricewaterhouse that it was offering something better.

That still wasn’t good enough for Labour leader who has been active on Twitter:

A picture might paint a thousand words but that doesn’t make them true.

Cunliffe and Mallard aren’t going to let the truth get in the way of their story which gives us lies, damned lies and Labour.


Back to failed policies of the 70s

March 20, 2014

Labour leader David Cunliffe made an announcement of forestry yesterday which would take us back to the failed policies of the 70s:

The Labour Party’s desire to turn the clock back to the 1970s is once again highlighted with their grab-bag of ideas for the forestry industry, says Economic Development Minister Steven Joyce.

“Subsidised loans, expensive tax concessions, preferential treatment, and make-work schemes for young people are all a flashback to a time when governments decided which industries succeeded based solely on political whim rather than competitiveness,” Mr Joyce says.

“This is classic 70s ‘government knows best’ interventionism and we all know how badly that ended.  What next, supplementary minimum prices for wood?

“Why should the forestry industry receive preferential treatment over the high tech manufacturing industry, ICT, the services industries, the construction industry or the farming industry? Or is it Labour’s plan to provide subsidies for everyone so we can subsidise our way to success?

“About the only thing they have got right is suggesting a focus on innovation. However it’s like they have been asleep since 2008 and now woken up ‘Rip van Winkle’ like to say we should do some innovation.
 
“While Labour has been asleep this Government has massively lifted its investment in innovation and helped grow private sector R & D across the economy by 23 per cent in just two years. Total government funding since 2010 for forestry-related science, research and product development alone amounts to over $160 million.

“The only sensible way to run a modern successful economy is to provide a strong macroeconomic base, supported by polices that lift the competitiveness of all firms. Our comprehensive Business Growth Agenda, which Labour has still not bothered itself to read, systematically improves access to markets, innovation, natural resources, capital, skills, and infrastructure.

“The results of our policies so far are reflected in strong growth, lowering unemployment, a much improved trade balance, stronger productivity growth, and real wages rising faster than the cost of living. Turning the clock back to the 70s is an amazingly out-of-touch response to some of the strongest economic data New Zealand has produced in many years.

“New Zealanders know they are just starting to see the positive results of five years of sensible modern economic policies and hard work by New Zealand companies. Turning the clock back 40 years would send New Zealand back to the bad old days of sluggish performance, high current account deficits, low productivity, and high inflation that the Labour Party knows so well.”

Acting Prime Minister Bill English highlighted the flaws in the policy too:

Hon David Cunliffe: In relation to the economics of forestry, is he comfortable that the rate of unprocessed log exports has grown at 10 times the rate of processed logs, given that the export of raw logs is really exporting jobs?

Hon BILL ENGLISH: I would need to check the member’s figures, but he may also be interested to know that around 60 percent of all forestry production is currently value-added. It may well be that in the light of a rise in prices for export logs there are more logs being exported, but anyone who has been in the industry knows that those prices can drop as fast as they rise. I am sure that there are many people in the forestry industry taking a longer view and keeping that in mind. . .

Hon Dr Nick Smith: My question is to the Prime Minister and it asks what reports has he received on the recent developments in forest processing in Tasmania, where its Labour-Green Government has fallen apart over the very issues of forest processing and where there has been a huge loss of jobs and confidence in that sector because the—

Mr SPEAKER: Order! You have made the point with your question.

Hon BILL ENGLISH: I have received the same—[Interruption]

Mr SPEAKER: The question was what reports has he received.

Hon BILL ENGLISH: The Deputy Prime Minister and the Prime Minister have received the same reports, obviously, which have been to the effect that the Government in Tasmania has overseen the destruction of the forestry industry by trying to get involved in it.

Hon David Cunliffe: Would the Prime Minister support an accelerated depreciation tax including for forestry processing?

Hon BILL ENGLISH: No, we are not entertaining that. Those kinds of policies were tried consistently, I think, from the 1970s when they were a bright idea, and they lead to unsustainable industries and unsustainable jobs as a whole lot of Australian workers are now finding out, where industries that were subsidised by the Government there are now closing down. . .

Hon David Cunliffe: Does the Prime Minister support a pro-wood Government procurement strategy to assist jobs and value added in New Zealand, including in those South Otago sawmills; if not, why not?

Hon BILL ENGLISH: No. The member should have more confidence in the forestry industry. It has evolved from the time in the late 1980s when sawmillers used to be able to get very cheap logs from Government-owned forests through to a modern processing industry that is internationally competitive and makes very sophisticated decisions about the balance of financial risk, different types of product, and exchange rate and price risk in export markets. The idea that Labour would do a better job of that is wrong, and it would end up destroying the forestry industry if it gets that involved in it. . . 

Criticism of the policy isn’t confined to parliament:

Labour’s “pro-wood” government procurement strategy will create an inappropriate commercial advantage for one construction sector over another, according to the New Zealand cement and concrete industries.

Announced today by David Cunliffe at the ForestWood conference in Wellington, the policy would mandate that “all government-funded project proposals for new buildings up to four storeys high shall require a build-in-wood option at the initial concept / request-for-proposals stage (with indicative sketches and price estimates).”

Rob Gaimster, CEO of the Cement & Concrete Association of New Zealand (CCANZ), believes that policies which appear to be giving preferential treatment to one construction material are misguided.

“It is inappropriate to mandate that those designing new government buildings consider wood as a structural option, and then require an explanation if an alternative material is chosen,” says Mr Gaimster.

“Government should not be picking winners when it comes to the selection of construction materials, which should stand or fall on their own technical, cost, aesthetic and sustainability credentials.

“In addition, the policy does a huge dis-service to the hardworking men and women in the cement and concrete industries. Favouring a single construction material during the design phase of a new government building could seriously impact on their livelihoods and jobs.

“This policy does not create a level playing field for the use of construction materials in government buildings. In fact, materials other than wood will be considerably disadvantaged.

“We are concerned about the wide-reaching implications of this policy and believe it should in no circumstances be adopted.”

Labour’s policy is designed to help one sector but would hurt another.

Gravedodger illustrates other shortcomings in the policy.


How foreign investment works

March 18, 2014

Act leader Jamie White explains how foreign investment works:

. . . The value of a business depends on its expected future profits. The seller of a company is in effect swapping the profits she would have got over future years for a lump sum she gets today. The lump sum (the purchase price) represents the present value of the future profits.
When a foreigner buys a New Zealand business, all the expected future profits of the business come into the country in the purchase price. When the actual future profits then go out to the new owner overseas, there is no net loss.
In fact, the transaction must involve a net gain for New Zealand. This is because, if the purchase price were exactly equal to the present value of the expected future profits, the Kiwi owner would have gained nothing from the transaction and would not have sold. The Kiwi seller must have valued the purchase price higher than the future earnings. So the transaction creates a net gain to New Zealand. . .
His comment was prompted by a speech from Labour leader David Cunliffe.
If Mr Cunliffe does not understand this, then he learnt little from his days at the Boston Consulting Group. If he does understand it but still peddles the popular myth of profits lost overseas, well, that is even worse. 
The worse option is the most likely one. Cunliffe should understand economics.
In ignoring what he knows he’s just pandering to prejudice in the hope it will win some votes.

Another poll confirms the trend

March 18, 2014

Support for he Labour Party is below 30% in the latest Herald DigiPoll survey:

Labour’s support has sunk nearly six points and it is polling only 29.5 per cent in the Herald-DigiPoll survey.

The popularity of leader David Cunliffe has fallen by almost the same amount, to 11.1 per cent. That is worse than the 12.4 per cent worst rating of former leader David Shearer.

National could govern alone with 50.8 per cent if the poll were translated to an election result.

The popularity of John Key as Prime Minister has climbed by 4.6 points to 66.5 per cent. That is his best rating since the election but not as high as he reached in his first term when he often rated more than 70 against Phil Goff.

The increases in support for National and the Greens since December put them at their highest ratings since the 2011 election.

The Greens are up 2.3 points to 13.1 per cent and with Labour would muster a combined 42.6 per cent.

New Zealand First is down slightly to 3.6 per cent but leader Winston Peters’ ratings as preferred Prime Minister at 6.5 per cent suggest the party could still top the 5 per cent threshold required to get MPs under MMP without requiring an electorate seat.

Other polls have shown a decline in Labour’s fortunes this year but today’s is the first to have Labour in the 20s since Mr Cunliffe took over the leadership from Mr Shearer in September last year. . .

Polling began on March 6, in the midst of the fallout over his use of trusts for donations.

But it continued through last week when Mr Key condemned minister Judith Collins for her failure to declare a dinner in Beijing with her husband’s business associates. . . .

The last fortnight was dire for Labour and last week wasn’t good for National, but maybe it’s only political tragics who are really interested in these issues.

Mr Key said the poll was a confirmation that a majority of New Zealanders believe the country is heading in the right direction “but clearly there is a lot more work to be done if we are to create the jobs and increase the living standards that New Zealanders want to see”. . . 

Asked if the issue of Mr Cunliffe’s of Ms Collins non-declarations would have affected the poll, he said: “Voters weigh up a great many factors when considering who to support but I continue to believe the strongest motivation is when a political party is focused on the issues that really matter to voters.” . . .

Individual polls bounce around but this one confirms the trend which shows National and its leader are popular, Labour and its leader aren’t.

There’s just six months until the election.

That’s time enough for National to slip a few points and make it difficult to form a coalition.

But it’s not a lot of time for Labour to climb out of the doldrums and convince voters it could offer good governance and stability with the collection of support parties it would need.


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