Supersize tax

April 15, 2014

Ask the Green party a question and what’s the bet, more and higher tax is the answer.

Tools such as taxation, regulation and legislation should be used to help curb the obesity epidemic, Green Party health spokesman Kevin Hague says.

Hague was speaking in New Plymouth last night. Earlier he told the Taranaki Daily News the same tactics used to fight smoking should be used against type-2 diabetes. . .

Taxes work to discourage smoking but people don’t have to smoke.

We all have to eat to live and taxing certain foods might persuade some people from choosing them but it won’t necessarily help them choose something any more nutritious instead.

Photo: The Greens want to impose extra taxes on fast food. What do you think? www.stuff.co.nz/national/politics/9929165/Greens-want-junk-food-legislation

 


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.

 


More RMA reform needed

April 6, 2014

Environment Minister Amy Adams says the 2012/13 Resource Management Survey shows the Government’s first phase of RMA reforms aimed at improving consenting processes are paying off, however further reform of our planning frameworks is still required.

The survey of how well councils are implementing the Resource Management Act shows that 97 per cent of consents were processed on time for the 2012/2013 period, compared with 95 per cent in 2010/2011.

“This is a vast improvement from the 69 per cent of resource consents processed on time in 2007/08,” Ms Adams says.

Labour and the Green party have opposed National’s reforms but the figures show the positive difference they have made.

Delays are expensive, draining money and energy.

Speeding up the process helps productivity, whether or not consent is given.

“The overall trend across the country shows that resource consenting is becoming more timely and efficient, with fewer staff processing more resource consents. I commend councils for this improvement in performance.”

However the survey finds that resources and staffing required for the current planning framework is a challenge, particularly given extensive consultation requirements and maintaining community input and interest in the often lengthy processes.

“It is not surprising that plan making is identified as an area where further focus is required, as this has also been identified by the Government as a key area for reform, says Ms Adams.

“Councils also highlight the challenges in the time taken to move through planning processes and the difficulty in achieving regional consistency due to the different stages and nature of District Plans.”

“The Government’s reforms are specifically aimed at improving decision-making at every level and a driving fundamental shift towards more proactive planning for what we need, and away from reactive decisions through consents and court appeals.”

The biennial survey has been undertaken since 1995 and monitors council’s performance in implementing the Resource Management Act.

The RMA survey provides information on the Council processes, rather than the social, cultural, economic and environmental outcomes they contribute to.

This latest survey covers the period 1 July 2012 to 30 June 2013 and all councils provided their data within the required timeframe and can be found at: http://www.mfe.govt.nz/publications/rma/annual-survey/index.html.

The RMA process is better than it was but further reform will make it better, reducing costs and delays for councils, applicants and anyone else supporting or opposing a consent.

 


If it’s that good doens’t need govt to do it

March 31, 2014

Rodney Hide thinks the Green Party and its policies don’t get enough rigorous examination and does his bit to counter that:

He thinks they are more a religious sect than a political party and has taken a look at policies espoused by James Shaw who has passed some sitting MPs on the party’s provisional list.

He says he wants to direct his “energies towards climate change, energy and sustainable economics.” I don’t know what that means but it doesn’t sound good. He goes on, “I believe we can be among the first to have every home generate more energy than it uses from the windmill on the roof.”

Wow. Sign me up. Off the grid. Living on fresh air. No more power bills. In fact, power companies paying me. And it’s not just me. Everyone. 

I would vote for that. 

But hang on. Why isn’t Mr Shaw making and selling these windmills? The market would be huge. Who wouldn’t want one?

Perhaps there are problems. Maybe the windmills are too big. Too heavy. Too noisy. Too expensive. Or the consent process too tough. I know my neighbours wouldn’t want one on my roof. Or perhaps his windmills don’t exist. . .

New Zealand already has a high proportion of energy generated by renewable resources.

That doesn’t mean there’s not room for more, but if windmills on every house was such a good idea, why would the government need to be involved?

Why would the government need to be involved in Shaw’s other big idea to have every vehicle on the road emit nothing more noxious than water vapour?

It sounds like a good idea but if it was good in practice why wouldn’t businesses be doing it?

The power of the state is an awesome, fearsome thing. But for all its power it doesn’t override the laws of physics, basic ecology or economics. In the bowels of the state, Mr Shaw would be thrashing about taxing this, banning that and spending vast sums on green scam after green scam. He would be desperately trying to get windmills on roofs, fish back in the sea, cars running clean and everyone rich.

The universe won’t be listening. The planet won’t care. All the man-made laws, all the taxes, all the subsidies won’t make his cars fly, his windmills spin, or his industry prosper. The world doesn’t work the way the Greens think. And the suffering? It would be immense. 

His dream; our nightmare.

These are strong words but they are based a lot more on reality than much of Green policy.

 


Norman helps National again

March 30, 2014

Undecided voters in the centre generally don’t like parties on the extremes of politics.

They don’t wholeheartedly support National or Labour but they prefer them to those at the more radical end of the political spectrum.

They are more likely to favour a stronger major party because of that, knowing that any of the wee parties which are needed to form a government will have a lot less leverage.

That’s one reason labour is struggling.

Some who might support it aren’t at all keen on the thought of the influence a Green Party with a third as many MPs as Labour would have.

Any flexing of muscles by the Greens might appeal to its supporters but it sends those to the right of the left and in the centre further right.

Russel Norman’s announcement he wants to be deputy Prime Minister will excite his party’s grass roots but it will scare a lot of undecided and swinging voters.

Green Party co-leader Russel Norman wants to be deputy prime minister if Labour and Greens become government after this year’s election.

Any cabinet formed after the September election should be proportional, and the deputy prime minister role would certainly be on the table, Dr Norman told The Nation today.

“Obviously it depends on the size of the vote,” he said. . .

Keeping talking like that, Russel, it will hurt Labour and help National.

P.S.

Does this ambition on Norman’s part expose the nonsense of co-leaders. After all, if he and Metiria Turei are truely equal as leaders, why would he be deputy PM ahead of her?


Not the workers’ friend

March 20, 2014

Kim Dotcom has taken court action to gag a former body guard.

. . . Dotcom made a successful application for an interim injunction against Wayne Tempero in the High Court at Auckland yesterday. The action came soon after the Herald reported that Tempero was set to release “secret revelations” about Dotcom’s “mindset and megalomania”. . .

That hasn’t stopped other staff talking to Whaleoil who has a story of slave wages, bullying, intimidation and the sheer effrontery of a man spending literally millions on himself but short-changing his most loyal staff.

Labour, the Green and Mana parties like to think they’re the workers’ friends.

They and New Zealand First have all been courting, or courted by, Dotcom in the hope he can help them defeat National.

The enemy of their enemy could be their friend but do they want to be friends with someone who appears to be anything but the workers’ friend?

And will the media which have given Dotcom a pretty easy ride, start asking some harder questions now?

P.S. Former Labour president Mike Williams, just said on RadioNZ National’s panel that he’s on Dotcom’s side with the gagging order.


Enemy of affordability

March 20, 2014

Greens like to think they’re friends of the earth.

They aren’t so keen on earthlings, and in their eyes some earthlings are even less equal than others as this exchange during question time yesterday shows:

4. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Will the Government propose any measures to restrict the sale of New Zealand farmland or residential land to foreign companies or persons?

Hon BILL ENGLISH (Minister of Finance): We are certainly not going to restrict Australians from buying homes after they migrate to New Zealand. The Government has already restricted overseas investment in sensitive land and residential land. We made changes to the regulations in 2010, which were reflected in a directive letter to the Overseas Investment Office. We believe these changes struck the appropriate balance between ministerial flexibility to consider a wider range of issues when assessing overseas investment and, at the same time, providing clarity and certainty for potential investors. I would note that under this Government the amount of sensitive land approved for sale to overseas buyers has been less than half what it was in the last 5 years of the previous Labour-Greens Government. I would also note that the OECD assesses our overseas investment regime as now one of the more restrictive in the developed world.

Dr Russel Norman: Does he consider that China has any lessons to teach New Zealand regarding foreign ownership, given that China protects its economic interests through restricting land sales to foreign buyers?

Hon BILL ENGLISH: The member may be more familiar than I am with the tenets of communism, but in China private individuals did not own land until recently, only the Government did, so even the Chinese could not buy land in China. But I am a bit surprised to find that the Greens only ever get this excited about foreign ownership when it involves the Chinese, who happen to have a much lower number of consents than Australia, the UK, Germany, Switzerland, and, I think, Sweden.

Dr Russel Norman: Does he have any concern that more than one in 10 homes in Auckland is purchased offshore and that, according to BNZ economist Tony Alexander, this figure is set to only increase?

Hon BILL ENGLISH: I know that the member has been conducting his own investigation into these issues by visiting the home of Kim Dotcom, a well-known foreign investor in Auckland real estate. I cannot confirm the member’s one in 10 number. The BNZ survey that I saw said that about six houses in every 100 are foreign-purchased and about a quarter of those are being purchased by the Chinese, which means that 1.5 houses in every 100 might be being purchased by people whom real estate agents think are residents of China.

Might is the operative word.

If the property isn’t big enough to require Overseas Investment Office approval, the nationality of the purchaser isn’t recorded.

And the fact that some people doesn’t look either Maori or Pakeha doesn’t mean they aren’t New Zealanders.

Dr Russel Norman: When will he and his Government consider there is a problem—will it be when one in five homes is purchased by offshore buyers, or will it be when one in four homes is purchased by offshore buyers? At what point will he acknowledge that there is a problem?

Hon BILL ENGLISH: We do not have the same problem about buyers being foreign as the Greens do. What we have a problem with is the very high cost of housing in New Zealand for New Zealanders. And all the analysis shows that the fundamental driver of the high cost of housing is not the Greens’ friends from China; it is the Greens’ friends in the planning departments of our city councils who insist on blocking new development of new housing. So the Greens are a much bigger enemy of the affordability of housing in New Zealand than the Chinese have ever been.

Restrictions on the supply of housing is a far bigger enemy of affordability than foreign buyers.

Dr Russel Norman: Does he consider that an increase in interest from offshore buyers in purchasing residential property in Auckland is increasing the price of housing for New Zealand homebuyers, or does he think that this big increase in demand from offshore is having no effect— that it is a special kind of market where a big increase in demand has no effect on prices?

Hon BILL ENGLISH: It is not obvious that there is a big increase in demand from offshore buyers. There is some anecdotal evidence that that is the case, and I know that that is certainly believed by some people, but it is yet to be established. The fundamental driver of the increase in housing is restrictive planning policy, which means that when there is more demand—whether it is foreign or, in this case, New Zealanders who have stopped migrating and are staying home and more people who are arriving in New Zealand as migrants—and those factors of demand are rising, the supply cannot react to it. All around the world restrictive planning laws mean higher prices and more volatile prices, and the Greens back that kind of policy. They should be backing the Government on getting rid of that sort of policy if they are really concerned about locking low and middle income New Zealanders out of the housing market.

Dr Russel Norman: Does he agree with Auckland house auctioneer Adam Wang that our ambiguous laws around capital gains tax are assisting the boom in the foreign buy-up of our

housing stock, and does he have any plans to deal with the fact that the capital gains tax exemption in New Zealand is part of the problem driving up house prices?

Hon BILL ENGLISH: All of those issues have been looked at by various inquiries, by the Productivity Commission, and by policy advisers, and it is possible that any one of them has some influence on the price. This Government, though, has focused on the biggest influence, and the most pervasive one, and that is restriction of supply. It is hard to understand why the Greens support housing planning policies that have the effect of driving up the wealth of the leafy suburbs at the expense of middle-income and low-income New Zealanders. I think that if the Greens were really concerned about equity in New Zealand and affordability of housing, they would be supporting the Government’s policies, not the Labour Party’s policies.

Restrictions on supply help those already on the housing ladder.

Labour and Green policies for higher taxes, will not fix that and their policies which will lead to higher inflation and interest rates would reinforce them as enemies of affordability.


No change good, change bad

March 19, 2014

Share market investors put their money on yesterday’s poll results:

The NZX 50 Index rose to a new record, following a global rally, paced by power companies after recent political polls put the government ahead, helping dispel fears the opposition parties will be able to overhaul the electricity sector. MightyRiverPower, Meridian Energy and Contact Energy rose.

The benchmark index rose 47.638 points, or 0.9 percent, to 5135.664. Within the index, 27 stocks rose, 12 fell and 11 were unchanged. Turnover was $167 million.

Better than expected US industrial production figures kicked off a global rally in equity markets which carried on into Asia. Hong Kong’s Hang Seng was up 0.5 percent in afternoon trading, Japan’s Nikkei 225 index advanced 1.4 percent and Australia’s S&P/ASX was up 0.5 percent.

Power companies paced today’s gains after a New Zealand Herald’s DigiPoll survey put the governing National Party at 50.8 percent support ahead of the September election. Labour, the main opposition party, garnered 29.5 percent. A key election policy of the opposition parties is to regulate the electricity market, creating a single state-owned wholesale electricity buyer. . .

“The electricity sector is up, and I’m going to put it down to the Herald DigiPoll results which were published, because they’re up across the board,” said Greg Easton, investment adviser at Craigs Investment Partners. “If there is no change in government, then that sector could really outperform after the election.” . . .

If no change in government good the obvious implication is that a change of government would be bad – and not just for energy companies and the stock market.


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.


Browning not wanted on Green voyage?

March 17, 2014

Paddington Bear had a suitcase labelled wanted on voyage.

The Green Party initial list  shows their agricultural spokesman Steffan Browning is not wanted on their voyage beyond the election.

He was 10 in 2011 and has dropped to 16 in this list.

The party currently has 14 MPs, they’d need a better vote than they got in 2011 if he’s to return to parliament.

1 Turei, Metiria
2 Norman, Russel
3 Hague, Kevin
4 Sage, Eugenie
5 Delahunty, Catherine
6 Hughes, Gareth
7 Graham, Kennedy
8 Genter, Julie Anne
9 Logie, Jan
10 Shaw, James
11 Walker, Holly
12 Clendon, Dave
13 Roche, Denise
14 Mathers, Mojo
15 Davidson, Marama
16 Browning, Steffan
17 Coates, Barry
18 Hart, John
19 McDonald, Jack
20 Leckinger, Richard
21 Rotmann, Sea
22 Moorhouse, David
23 Elley, Jeannette
24 Ruthven, Susanne
25 Perinpanayagam, Umesh
26 Perley, Chris
27 Moore, Teresa
28 Kennedy, Dave
29 Langsbury, Dora
30 Barlow, Aaryn
31 Lawless, Jennifer
32 Woodley, Tane
33 Goldsmith, Rachael
34 Rogers, Daniel
35 Kelcher, John
36 Smithson, Anne-Elise
37 McAll, Malcolm
38 Ferguson, Sam
39 Ford, Chris
40 Hunt, Reuben
41 Wesley, Richard

The 2011 list was:

 
1 TUREI, Metiria
2 NORMAN, Russel
3 HAGUE, Kevin
4 DELAHUNTY, Catherine
5 GRAHAM, Kennedy
6 SAGE, Eugenie Meryl
7 HUGHES, Gareth
8 CLENDON, David
9 LOGIE, Jan
10 BROWNING, Steffan
11 ROCHE, Denise
12 WALKER, Holly
13 GENTER, Julie Anne
14 MATHERS, Mojo
15 SHAW, James
16 HAY, David

Gareth Hughes and Kennedy Graham have swapped places from 2011.

. . . “The list we are releasing today is by no means final. It is just a useful guide for members all over the country to use when making their own personal selection.”

The initial list is put together by delegates and candidates who attended the party’s February candidate conference. Delegates were able to put candidates through their paces and evaluate their performance. The initial list now goes to party members nation-wide to vote on. The Green Party uses STV voting. . . .

The useful guide clearly indicates that Browning wasn’t rated highly by conference goers.

That view will be shared by most farmers who would not want him anywhere near the primary industries portfolio.

Frequent commenter here, Dave Kennedy is at 28.


Left’s jiggery pokery won’t work

March 17, 2014

I find it difficult to understand the headless chookery that’s going on about the very small increase in the official cash rate from a historically low level.

People with income from interest-bearing investments will be pleased and while the rest of us who are paying more for loans might not like it, we knew it was coming.

It was well signalled and anyone with the slightest bit of financial acumen would have known the odds of a rise were far greater than a fall or keeping the rate at its historic low of 2.5%.

In spite of this the opposition and some commentators are playing at Chicken Little, acting like the sky is falling and inevitably calling on the government to do something.

Well, the government is doing something.

Finance Minister Bill English told TVNZ’s Q+A programme that the Government is doing all it can to help households affected by interest rate rises:

“There isn’t some kind of magic solution her like jiggery-pokery with the Reserve Bank Act, or pretending prices are lower than they are, which is what the Greens and Labour are promising. It’s about the kind of diligent hard work we’ve all been doing, not just this government but households and businesses, becoming more productive, more careful with our spending, getting debt down, a bit less consumption, and good control of inflation. So we have the opportunity here for a sustained economic recovery, and if we work on keeping our costs down, increasing our productivity, we could have four or five years where there are more jobs and higher incomes, and that’s what helps households get on top of increases in interest rates.”

The government’s careful management and strict control on its spending are two reasons interest rates have been so low for so long.

The need to keep on that path is just as great now the economy is growing because a government splashing cash around would fuel inflation which in turn would put pressure on interest rates.

He said this week’s OCR increase is due to the relative strength of our economy

“The small increase in interest rates that was announced the other day is an indication of the relative strength of our economy. There’s a lot of economies around the world would like to see some signs that interest rates were reflecting the fact that the economy’s growing. The other job we have is to support households and businesses by doing everything a government can to reduce pressure on what are inevitably rising interest rates and we’re pretty clear about that where we can influence that pressure, it’s around the housing market where we spent two or three years working on improving supply to the housing market. It’s around the labour market where we’re doing our best to align our training systems and migration with the skills that are needed in a tight labour market. . . 

If there was a magic solution every country in the world would have employed it.

There isn’t – there’s the jiggery pokery the opposition are threatening us with which won’t work, or the careful management and restrained spending which the National-led government is doing that is working.


Taxed into oblivion

March 12, 2014

Quote of the day:

Personally, I’ve never heard of an economy taxing its way to greatness but I have sure heard of economies taxed into oblivion. – Federated farmers Dairy chair, Willy Leferink.

No party is promising tax cuts, but Labour and the Green Party are threatening us with more and higher taxes based on political philosophy rather than economic sense.


Greens thin-skinned?

March 12, 2014

Shane Jones is unrepentant about insulting  a potential coalition partner and one of its MPs.

Labour MP Shane Jones says Greens are too thin-skinned after the party laid a complaint about his attack on one its MPs.

Greens’ head of staff Ken Spagnolo said he had raised Mr Jones’ comments with Labour head of staff Matt McCarten.

Mr Spagnolo said it was not a formal complaint, but he had told Labour that Mr Jones’ comments about Greens’ fitness to govern were “unhelpful”.

Mr Jones, Labour’s economic development spokesman, had criticised Green MP Gareth Hughes on Radio Waatea for “carrying on like a mollyhawk” in his opposition to offshore mining.

The comments earned him a telling off from leader David Cunliffe, who said that the comments about a potential coalition partner were inappropriate.

Mr Jones was unrepentant this afternoon.

“Is this the same Green Party that complains of Colin Craig being too thin-skinned?” he said.

“I’m from Kaitaia. I know it’s mollyhawk in the north. Further down the line it’s mollymawk. Now I could’ve got my names wrong but people should just loosen up.

“The thought that it’s led to a complaint, I’ll just leave the public to judge that for what it is.” . . .

Th Greens are often likened to watermelons – green on the outside and red inside but melons have thick skins.

Insulting potential coalition partners might not be helpful it you’re trying to appear like a government in waiting, but this does look more than a little thin-skinned when Russel Norman is refusing to retract his comments about Conservative leader Colin Craig.

It’s also a distraction.

Heads of staff are supposed to keep their heads down and stay out of the headlines.

If Spagnolo felt the need to raise the issue with McCarten there was no need to go public about it.

Jones was also in trouble for comments about Asian students.

Meanwhile Cunliffe confirmed he had spoken to Jones about straying outside his portfolio areas and using strong language to attack the Green Party.

But he had not been disciplined

“I’ve spoken to him. The message to caucus is …that all of us are consulting with our colleagues if we are crossing portfolio and manage our comments in a proper way.”

He said Jones was a much-valued colleague but occasionally his rhetoric crossed the line. There was a clear understanding not to attack potential coalition partners.

At the weekend Jones criticised the number of foreign university students – a responsibility that crossed the roles of Grant Robertson and Raymond Huo. Cunliffe said it was a heat of the moment debate comment and fully understandable. . .

This is straying into New Zealand First’s xenophobic territory. It also highlights tensions in Labour between its factions,  once more gives Jones more attention than the rest of his colleagues put together, albeit for the wrong reasons.


The measuring class

March 5, 2014

Finance Minister Bill English points out the difference between National and Labour in yesterday’s finance review debate:

Hon BILL ENGLISH (Minister of Finance): Mr Chairman—

Hon Damien O’Connor: What can we trust?

Hon BILL ENGLISH: Well, it is interesting to hear the interjection from the Labour side asking the question: “What can we trust?”, because I can tell you whom those members cannot trust, and that is their leader with his trust. That is the answer to the question. Damien O’Connor asked, today of all days: “What can you trust?” The answer, if you are a Labour member who voted against David Cunliffe, as most of them did, is that they cannot trust their leader with his trust. This is the leader who says: “I’m going to pay back the money to the people, whom I cannot identify, who gave it to me.” So that is what is going to happen.

David Cunliffe’s contribution to the economic debate today is: “People gave me money confidentially to a trust so I could avoid declaring it on the pecuniary interests register. And now that I’ve said I’m going to pay it back, I’m going to pay it back to people whose names I don’t know.” His own members of his own caucus do not believe that. Of course, the real shame of all this is that many New Zealanders who used to rely on the Labour Party to protect and advance their interests, including those who show they are on below 60 percent of the median wage, now find that the Labour Party is enmeshed in a tangle of its own making over whether its own leader is trying to get around the pecuniary interests of MPs. And who is left? Who is left to advance the interests of the lowest-paid New Zealanders? The John Key – led, National-led Government. That is who. We spend more time talking about the most vulnerable and those on the lowest incomes, because we are the Government, which last week, working with aspirational, low-income New Zealanders, got 1,200 of them off a welfare benefit and into a job. And if there is one thing Labour does not like, it is people getting off welfare and into work, because they might become ungrateful. They might become more interested in lower taxes than in higher benefits. Is that not a risk? Those people might start saying: “We want decent education for our kids because we understand the power of work.”, whereas Labour would rather they stayed on welfare and accepted mediocre education, because if you are disadvantaged, you cannot expect to learn. And that is another big difference. The National Party believes that the point of a public education system is precisely to overcome disadvantage. The Labour Party believes that the point of a public education system is to make sure that those who are disadvantaged do not learn. Because you cannot teach them. They are beyond hope. They do not deserve aspiration. They cannot learn. And then you can rely on them voting Labour, if that is their situation. Well, the evidence is that more and more of the people who used to vote Labour when Labour was a working-class party now do not believe that Labour can advance their interests. In the old days Labour was a working-class party; now it represents the measuring class.

Hon John Banks: Who?

Hon BILL ENGLISH: The measuring class—people with tertiary education who spend all their time telling us how much misery there is in our community. Labour knows even less than ever about what to do about it. Who is doing something about it? The National Party. We are not sitting around spending for ever arguing over measuring the misery; we are trying to break the patterns that locked it in. That is what is behind the whole-of-Government approach to this financial review. It is a National Government focused on getting results and working with people who have got hope and aspiration, and this year we are going to get to argue with a party that believes that none of those things can be achieved because people are too disadvantaged to be able to get ahead. We do not write them off; we work with their aspirations and their hope.

Labour and its potential coalition partners on the left – the Green and Mana Parties, want to throw money at problems without trying to solve them.

National has put a lot of effort into understanding the causes of the problems and directing money where it will do most good.

The left want people to stay dependent, National is helping people become independent.

The left would make work for the measuring class but keep the poor in need.  National is helping people get real work to enable them to help themselves, give them choices and prosper.

Labour and its friends favour the soft options which entrench dependency and poverty.

National understands the importance of education and the power of work to break the patterns that lock in poverty and all the social and economic problem which go with it.


How to lose friends and votes

March 5, 2014

Is the Green Party being accused of defamation by Colin Craig or is it one of  its co-leaders?

This media release  says:

The Green Party has launched an appeal to cover the costs of defamation action being taken against the party by Conservative Party leader Colin Craig. . .

“The Green Party will defend the defamation action being brought by Colin Craig because we believe in the freedom of political speech and we believe in an inclusive and tolerant society,” said Green Party Co-leader Dr Russel Norman. . .

That’s very clearly stating the action is being taken against the party.

But the NZ Herald thinks it’s Norman against whom action is being taken:

Mr Craig confirmed this morning that he would start defamation proceedings against Greens co-leader Russel Norman, but with a narrower scope than originally planned.

Mr Craig would first seek a retraction from Dr Norman regarding his statements about the place of women in New Zealand. A claim against Dr Norman’s comments on gays would be delayed. . .

The party has been advised that defending the case was likely to cost around $70,000.

It will launch a campaign today to raise money for Dr Norman’s legal fees. . .

That is clear that it is Norman, not the party, against whom the action is being taken but the party is soliciting donations to help fund the defence.

They might think the co-leader and the party are so intertwined it makes no difference, but members and supporters might feel differently.

When Labour asked its members to help repay the money the party had illegally misspent on its pledge card they were less than impressed.

Many were on low to modest incomes but still happy to raise funds for the party to help it win elections. They were not at all happy about being asked for money to make amends for the consequence of a decision made by senior MPs and party officers.

The action against Norman isn’t in the same league and I think Craig is wrong to pursue it. I agree with the many commentators who’ve said he should harden up.

But Norman could stop the waste of time and money by apologising.

He says it’s about freedom of speech, I think it’s more about his pride and he, and the party, are asking supporters to pay for that.

They are free to do so, and maybe some will.

But others will feel, as Labour supporters did, that their precious spare time, energy and money would be better spent on the cause they believe in, not on an expensive sideshow.

Burning off the goodwill of supporters is never a good idea but the danger doesn’t stop there.

There’s only so much space for news and any attention Norman and his party get for this nonsense is attention not given to matter voters will regard as far more important.

Allowing the action to continue could well lose him and his party friends and votes.


What’s he offering?

March 4, 2014

Liam Dann asks a very good question:

What is David Cunliffe offering? A dramatic experiment with a winning formula? A worrying fix for something that isn’t broken?

He’s referring to Labour’s determination to follow Green Party policy to meddle with the Reserve Bank.

Labour’s embrace of Green Party policy to reform the Reserve Bank Act is a big stumbling block for the party if it wants mainstream acceptance from the business community.

It surely gains the party few fresh votes from the wide pool of mainstream voters who find monetary policy debate arcane.

Yet it makes Labour almost impossible to endorse for many of the nation’s most powerful and influential business leaders.

The monetary policy reformists are full of ideas about the magic a broader definition of the Reserve Bank Act might achieve. But they ignore the extent to which having one target – inflation – has worked. And just how fundamental controlling inflation is to creating a stable economy on which growth can be built.

Why, when the Act has just seen us through such an enormous global downturn so efficiently, would you change it. In the hope it might bring the dollar down?

Well, if you damage the economy the dollar will certainly fall. But it seems a brutal path to take.

And why, if you were going to make changes, would you loosen the shackles during the growth phase of the economic cycle – just when inflation starts to become a serious risk.

We should be grateful we don’t have to make radical changes to our economy. We’ve come through the downturn well, and while National can take some credit for steering the ship, so too can the last Labour Government for the healthy growth it oversaw.

Radical change is for those nations that have run out of options. Let’s leave it to the Greeks.

National has generally trod a cautious path, some would say too cautious. But it’s getting results.

The economy is growing, and other economic indicators like business confidence, investment intentions and employment are positive.

All of this would be at risk if inflation is let loose with the inevitable steep increase in interest rates that would follow.

In 2008, when Labour was last in power interest rates were about 11%.

Now they’re about half that and while they’re expected to rise providing inflation is kept under control, they shouldn’t get back to double figures.

But if a Labour/Green government starts meddling with the RBA, inflation will surge and interest rates will  too with the high cost that imposes on business and households.

If people are concerned about the affordability of houses and farms now, how much worse will it be when interest rates are twice the current rate, or higher?

That’s what Cunliffe is offering.


Which election is Labour trying to win?

March 3, 2014

Last Monday when interviewed by Kathryn Ryan, Labour leader David Cunliffe said:

“We all know the Government is going to change. It’s either going to change this time or next time. I think it’s more likely to change this time, and if it does, the question in front of New Zealanders is what is the composition of that new government going to be?”

For a leader to suggest he’s focussed on anything other than a win in the next election is unusual.

Could it be that he has a two-election strategy, to increase Labour’s vote at the expense of the Green Party this year in the hope that will give him a really strong foundation to win the election in 2017?

His interview on The Nation adds to that suspicion:

• Cunliffe refuses to guarantee the Greens’ place in Labour-led government – “that depends on how the voters decide.”
• Withdraws promise by previous Labour leader David Shearer that Greens will get a proportionate share of Cabinet seats – “we’re different roosters, I’m not doing it that way” – and won’t discuss coalition deals before election.

How the voters decide is the sort of game-playing Winston Peters indulges in.

Giving voters a good indication of what sort of government their votes might result in gives them the power. This shilly-shallying leaves the power with the parties.

But Cunliffe is firing a warning shot across the Green’s bow on purpose.

Voters in the centre aren’t keen on the radical left policies of the Green Party and many would prefer a strong National-led government than a weak Labour-led one beholden to the Greens.

All polls put National well ahead of Labour which would need Green support to govern, and probably some of the other minor players as well.

If Cunliffe could suck votes from the Greens on its left flank it wouldn’t increase the left-bloc but would make Labour stronger.

The swapping of votes within the left wouldn’t be enough to win this election.

But a stronger Labour Party would have a much better chance in the next one if it relegated the Green Party to a very distant third and therefore a much more minor player in government that it would be on current polling.

The trick for Cunliffe would be to lose but not so badly that he’d be deposed as leader.

That would be a delicate balancing act at the best of times and will be even more difficult if the ABC -  Anyone But Cunliffe – decide they’d prefer a big loss and the chance of a new leader.


Why stop at $15?

February 25, 2014

Labour Minister Simon Bridges announced the minimum wage will increase from $13.75 an hour to $14.25.

 . . The Starting-Out and training minimum wages will increase from $11 an hour to $11.40 an hour, which is 80 per cent of the adult minimum wage.

“Setting these wage rates represents a careful balance between protecting low paid workers and ensuring jobs are not lost,” says Mr Bridges.

“The increase announced today balances the needs of both businesses and workers and will have minimal impact on the wider labour market and inflationary pressures.

“This increase will keep the minimum wage at around 50 per cent of the average hourly rate, which is the highest rate in the OECD.

“The Government is firmly focussed on growing the economy and boosting incomes. Through our Business Growth Agenda we are creating opportunities to help grow more jobs in New Zealand, for New Zealanders.” . . .

That nearly half those surveyed think that’s not enough goes to show most people don’t understand the issues.

The only sustainable way to increase wages is by economic growth.

Without an increase in productivity and profit, an increase in wage rates will result in a decrease in job numbers.

The Green Party doesn’t understand that.

The Greens would have immediately raised the minimum wage to $15 an hour, Green Party Co-leader Metiria Turei said today. . .

Why stop there?

“Around 125,000 kids live in families where the adults earn less than the living wage. It is in the government’s hands to end poverty for working families and improve the lives of those kids. . .

Those families get Welfare for Families through which those with two children pay no net tax until they earn $50,000. Any increase in their pay will reduce their welfare. That’s less money from public coffers but they’ll be no better off and could be worse off if jobs are lost.

That living wage is an arbitrary figure and last week’s increase in it was based on different methodology from the original figure:

The ‘new’ living wage has shifted the goalposts and appears to be more about politics than public policy, says BusinessNZ.

Last year the living wage campaign said $18.40 should be the living wage, calculated on the basis of the living costs of a family of four.

The promoters now say the living wage for this year should be updated to the higher rate of $18.80.

“But the report shifts the goalposts,” BusinessNZ Chief Executive Phil O’Reilly said.

“The increase from $18.40 to $18.80 is not based on the same methodology as last year.

“Using the same methodology, for the same family of four, would show the new living wage should really be $22.89.

“If last year’s formula said $18.40 was needed for a living wage, and the same calculations now show $22.89 is required, why isn’t the campaign seeking $22.89 an hour?” Mr O’Reilly asked.

“Either the original calculations were flawed, or the campaign is just picking numbers out of thin air.”

Mr O’Reilly said decision makers could not have confidence that the living wage figures were soundly based.

“This switch in the figures used is important for taxpayers and ratepayers who are being asked to pay for the campaign. Wellington ratepayers are now funding the living wage policy for council employees and taxpayers would be funding it for all government employees under Labour Party policy.

“There can be no confidence in a living wage proposal set on an arbitrarily changing basis.”

The whole concept of a living wage which decrees everyone should be paid enough to support a family of four, regardless of what the work they do is worth, is flawed.

For the record, all our staff are paid more than the minimum wage.

That’s a decision we make in negotiation with them taking into account their skills and experience, what they’re required to do, the value of all of that and what the business can afford.


Follow

Get every new post delivered to your Inbox.

Join 1,158 other followers

%d bloggers like this: