Republic inevitable – McKinnon

April 7, 2014

Sir Don McKinnon, former deputy Prime Minister and Commonwealth Secretary General, says it’s inevitable that New Zealand will become a republic.

“I think it’s inevitable. I don’t know when and I’m not going to campaign actively one way or the other. I have a great respect for Her Majesty the Queen. I had so many meetings with her, and I have respect for Prince Charles. We had him here a little over a year ago and he proved very popular with the people. But it’s a debate that will continue, it’s important we have a good debate about this and about the flag.

“I think we have been for a long time, and I’m quite certain the Royal Family understands that completely. Look, 54 countries in the Commonwealth, only 16 are realms, and I can tell you now, one Caribbean publicly and three Caribbean privately are probably going to give up that relationship with the monarchy when the Queen dies. So it is a diminishing group of countries, and the important thing is for us to openly and candidly debate the issue.”

I think he’s right that it’s inevitable but unless there’s a big change of opinion it won’t be happening soon,

Recent polls show no burning desire for change.

I am agnostic on the issue.

I don’t like the idea that someone has power, albeit titular, and prestige through an accident of birth rather than their own efforts.

However, what we have works, is stable and relatively inexpensive.

Sir Don’s comments were made during an interview on Q & A.


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.


Opposition rhetoric on regions wrong

October 28, 2013

The Opposition has decided there’s rich political pickings in saying the regions are in decline.

But once more their rhetoric isn’t supported by the facts:

Economic Development Minister Steven Joyce has told TV One’s Q+A programme that the regions are not in decline despite what Labour is saying.
 
Mr Joyce told deputy political editor Michael Parkin: “With the greatest respect to my dear friends in the Labour Party, they’re trying to talk this up. The reality is the regions are lifting NZ out of the GFC (Global Financial Crisis). So, regions like Taranaki, Waikato, West Coast and Southland. The West Coast has the highest average income after the housing costs of any region in the country. That’s the reality of the situation.”
 
He says the government’s move to promote oil and gas exploration, and the Ruataniwha dam project, which is before a board of inquiry at present, would have a “massively positive impact on Gisborne and Hawke’s Bay if they proceeded”.
 
“In Northland, the opportunities are similar there. There’s minerals opportunities, there’s opportunities, frankly, with the Treaty settlements that Chris Finlayson has been working very hard on, opportunities to maximise the productivity of Maori land in Northland, which is being closely worked on with the Ministry of Primary Industries and various Maori landowners in the region,” he says.
 
Mr Joyce says providing good infrastructure to support this regional economic investment is also vital.

Labour has only a couple of electorate MPs outside the main centres, none of the other parties have any.

If they had MPs who lived in, and served, the regions they’re talking down, they might have a different, and more positive, view than the one they get by cherry-picking bad news stories as they pop in and out for photo opportunities.

Some other points from the interview:

. . . 15 out of the 16 regions grew in the population census that’s just happened. The incomes of those regions is going up. There’s lower unemployment in just about every region bar three than there is in Auckland, and Auckland gets a lower share of government spend on per head of population basis than the rest of the country. . .

MICHAEL       You’ve got unemployment. The reality is that the unemployment levels in Gisborne, Manawatu, Northland are increasing at an incredible rate.

All three of these regions were hard hit by last summer’s drought yet the Opposition isn’t supportive of irrigation which would provide significant protection from dry weather.

 
STEVEN         Yeah, you’ve picked the three regions I agree with you, and we can talk about those regions, but, actually, most of the rest of the country, including the whole of the South Island and the lower North Island and Waikato and Taranaki have all got lower unemployment rates than Auckland. And also the average income across NZ is one of the lowest differences between regions as it is in anywhere in the OECD. Now, this doesn’t mean to say there isn’t work to do, so let’s come to those regions. So, in the Gisborne/Hawke’s Bay area, for example, the government is focused on a couple of things that I think would really move the dial, if they were successful, in terms of opportunities for those regions. One is the oil and gas exploration and the other is the Ruataniwha dam project which, of course, is going in front of a board of inquiry at the moment. Now, those things undoubtedly would have a massively positive impact on Gisborne and Hawke’s Bay if they proceeded, and that’s the sort of things I think we have to look at in those resource-heavy regional economies. In Northland, the opportunities are similar there. There’s minerals opportunities, there’s opportunities, frankly, with the Treaty settlements that Chris Finlayson has been working very hard on, opportunities to maximise the productivity of Maori land in Northland, which is being closely worked on with the Ministry of Primary Industries and various Maori landowners in the region. And, of course, there are other opportunities in the primary sector as well and agricultural opportunities. So all the things the government is doing-
 
MICHAEL       You mentioned Hawke’s Bay and Taranaki there. Like, I mean, are we too focused on this resourcing, this petroleum, the mining? Are we putting all our eggs in one basket?
 
STEVEN         No, I don’t believe so, Mike. The reality- No, with the greatest respect, you just need to look at the numbers. The Taranaki is the most successful region in the country over the last few years and there’s a reason for that, and if you don’t want to learn the lessons of that, then you just stick your head in the sand and forget about it. But the reality is it’s about exploring all our opportunities. Now, not every region has similar opportunities to Taranaki; they have different ones. But the government’s priority is to open up those opportunities. You mention Shannon, for example, and I think it’s very sad what’s happened to those people in Shannon. So, what’s the opportunity there? Well, Shannon is in a place called the Horowhenua, which is not far north of Wellington, and Wellington is one of our largest cities-
 
MICHAEL       So move to Wellington. Is that what you’re saying, Minister?
 
STEVEN         No, no, not at all, and don’t get me wrong. But we have a lousy transport link between Wellington and the Horowhenua. You open that up, just like we’re doing with the Waikato Expressway south of Auckland, and suddenly businesses can develop along that highway in those towns leading to the capital city. The National Party’s very focused on that. We have actually got a number of projects underway – the Kapiti Expressway, Transmission Gully – but there’s a whole lot of people on the left who have got their heads in the sand about this, and I think it’s actually very sad, because they’re focussing on the area closer to Wellington, but I want to focus on those regions in Horowhenua and the Manawatu who would have great economic benefits out of that one piece of infrastructure. That’s very important. . .

Another point is that jobs are lost and gained all the time:

STEVEN         Well, it is difficult. There’s no doubt about it. But, actually, we lose a quarter of a million jobs in the NZ economy every year, and we create a quarter of a million jobs in the NZ economy every year, and there are industries that are having struggles for various reasons. So, if you take the meat and beef industry and the fellmongery which is associated with that, there’s a long-term over capacity because of a decline in numbers because the dairy industry’s growing. The dairy industry in the Manawatu, you just have to look around, is a much more successful industry currently. So those industries are rationalising. Now, you can’t stop that, and Mr Cunliffe wandering around saying you can is actually dead wrong, and most of the public know that. It’s the same with the postal industry. The reality is we’re not all offering to go out and post more letters to keep NZ Post afloat, so it actually does have to change. The opportunity there is to attract more investment and do more things that attract more investment, and the difficulty that those on the left have, particularly the Greens but also the Labour Party, is they sit there and try and pretend that’s not what’s necessary-

What’s needed is to make business easier:

STEVEN    . . .. What you have to do to make a difference is let people explore the economic opportunities in each region, and that means freeing up the RMA so that people can make calls. You took the West Coast there, Tony Kokshoorn on the West Coast. It’s a travesty the time it’s taken for Bathurst Resources to actually get the ability to open an open-cast mine on the West Coast right next to the Stockton Mine that would employ 225 people, and that’s why we’re making the RMA changes that we’re making so that doesn’t happen again, so those people would have jobs to go to on the West Coast. Now, that is a very significant economic opportunity. It’s finally got the go-ahead, and Labour and the Greens have been opposing it the whole way through, and that’s where there’s a real lack of understanding of what’s really required for regional development.

The Opposition appear to think more of the things which make business difficult – regulation, tax, inflexible employment law – will help.

They won’t and any policies they’ve announced so far will make business growth and the jobs which flow from that, more difficult in cities and the regions.


ACC levies down, pay up

October 21, 2013

Finance Minister Bill English says ACC levies could drop more than first thought and pay rates will increase:

The Government is planning to reduce ACC levies by as much as $2 billion over the next two-three years, Finance Minister Bill English said today.

Speaking to Corin Dann on TV ONE’s Q+A, Mr English said that ACC has “by combination of things, including just doing a better job of rehabilitating people sooner” given the Government the opportunity to reduce levies substantially – “the equivalent of a four cent cut in the company tax rate.”

Mr English also told Corin that in the same two-three year time-frame, New Zealanders can look forward to higher pay increases.

““The good news for the punter is that business confidence is at the highest it’s been at for many years.  That indicates that in their workplaces, there’s growing confidence that they can sell more, that profits are going to be up, that pay rises are coming.             

“There are some things that will force them to do it.  One is just their need to get hold of skilled people.  We’ve already got skill shortages in some areas.  As employment— As new jobs grow, you’re going to see more of that,” Mr English says.

ACC levies and pay rates are related. Lower levies leaves more money with businesses which makes them better able to afford wage increases but the positive outlook is based on much more than that.

The economy is growing and businesses are doing better.

They will have several priorities for increased earnings including reducing debt and investment in their businesses. Included in that investment will be pay increases for staff.

The full interview is here.


When the ex comes back

August 7, 2013

In even the best relationships it can be a bit difficult when the ex comes for a visit.

It’s hard for the new partner not to feel second-best and that the ex is more articulate, more respected, more popular.

Labour leader David Shearer would be forgiven for feeling a bit like this when Helen Clark, the woman he succeeded, returns to New Zealand and is fêted by the media.

This week he has even more reason to feel that way because in the interview on Q & A she undermined the opposition to the GCSB Bill.

. . . Helen Clark told Corin Dann that there is a need for a GCSB and she’s urging dialogue across the political divide.

“The answer is yes, you do, because you need that foreign intelligence, and not least for safety and security reasons. I think the real issue is, is there a gap in the law, which the Kitteridge Inquiry apparently found that there was, and if so, how do you deal with that and do you take the opportunity at the same time to write in more controls to protect the privacy of the individual? That, as I see it, is the debate raging at the moment.”

Ms Clark says when her government brought in the 2003 GCSB legislation ”that actually took GCSB out of the shadows and made it a government department with its own Act, which was good. But, you know, in retrospect, as Miss Kitteridge has found, perhaps there was a gap in the law. So that has to be dealt with, but I think it’s really important to try to reach across the political divide when you’re dealing with these issues.”

Ms Clark says, “Try and take the politics out of it and look at what do we as Kiwis need to protect our interests and how do we protect the privacy of individual Kiwis who should never be caught up in a giant trawling exercise across their communications.”

Shearer and Labour had the opportunity to be the grown-ups in opposition by acting like a government in waiting on this issue.

Instead they’ve just been playing political catch-up to the Green Party and Winston Peters who know they’ll never have to lead a government.

They’ve missed their opportunity to get better legislation and because of that have been wasting their time and our money filibustering on the Bill which will eventually pass anyway.


Their problems not necessarily ours

July 21, 2013

Visiting academic Robert Wade made the most of his opportunity on Q&A last week to opine about inequality in New Zealand.

He was alter forced to admit he’d been a bit sloppy and shouldn’t have included New Zealand in his view about the 1% ruling for the 1%.

He was wrong about growing inequality too. Brian Fallow writes:

The idea that New Zealand has become one of the most unequal societies in the developed world is just not supported by the data. . .

A standard measure of income inequality is a thing called the Gini coefficient; the higher it is, the greater the inequality.

Since the global financial crisis New Zealand’s has whipped around – it fell in the latest survey, reversing a jump in the one before – but the trend line through it is flat at a value of 33.

That is similar to the Gini scores of Australia, Canada and Japan, which ranged from 32 to 34, well below the United States’ 38 and a little above the OECD median of 31.

Another way of measuring income inequality is to look at the income of the top decile or 10 per cent of households (when ranked by income) and compare it with the bottom decile’s.

The average over the past four household economic surveys is that the top decile have received 8.5 times the income of the bottom one, after tax and transfers.

That puts us in the middle of the OECD rankings, and lower than Australia and Canada (8.9 times), Britain (10 times) and the United States (16 times).

The definition of income here is household disposable (or after-tax) cash income from all sources. So it includes transfer payments like New Zealand superannuation, Working for Families tax credits and welfare benefits.

The tax and transfer system dramatically reduces income inequality among the working age population compared with market incomes alone, reducing the Gini score by 22 per cent.

Again, this is similar to Australia (23 per cent) and not much worse than the OECD norm (25 per cent). . .

“For many OECD countries, lower income households tended to lose more, or gain less, than high income families,” the report says.

For New Zealand, however, there was a small gain for bottom-decile households of 1 to 3 per cent and a net fall, of around 8 per cent, for the top decile.

These facts don’t fit the narrative of a crisis of inequality which the left keep labouring.

There is poverty here but Rob Hosking points out that won’t be solved by importing solutions to other people’s problems .

Visiting academic Robert Wade brought in all the rhetoric about the “austerity” and “top one per cent” to these shores and imported them, holus bolus, into the New Zealand context.

Professor Wade later backtracked from his comments, but the important point is not a “sloppy” – to use his own description of his language – sermon from a British academic.

Rather, the important point is the way local “progressives”, as they like to call themselves, lap this stuff up. . . .

This goes further than the colonial cringe – it’s a kind of colonial S&M. Oh please humiliate us, the local anti-colonist progressives plead to their lofty offshore masters. Tell us how bad we are. Beat us, hurt us, and make us feel cheap.

Bring in all that guff about austerity measures, the top 1% of the country holding most of the wealth and making all the decisions and we’ll all just pretend we’ve got the same issues as the US or the UK.

It would not matter – apart from perhaps being a fascinating if rather hilarious study in group psychology – if it were not the fact this group then advocate importing their favourite solutions from their colonial, tenured masters northern hemisphere academia.

Fortuitously, the same week Professor Wade was titillating his local progressive followers with how dire New Zealand is the latest figures on inequality here came out.

And New Zealand is pretty well OK. Inequality isn’t growing – in fact, it has shrunk a bit in recent years – and the top 1% here get 8% of all taxable income – comparable with Sweden, Norway, France and Australia, and much lower than the UK (14%) and the US (17%). . .

So our colonised progressive movement is rather off the beam on this one and it is probably why the left in New Zealand is just not connecting with voters at present.

If you want to get elected you need to demonstrate you understand the concerns of the people you want to elect you, and that you have solutions to deal with those concerns.

Pretending the issues here are the same as the UK or the US, and getting academics in to pontificate about the solutions to deal with those other countries’ problems, is perhaps not the best way to go about this.

Nor does it seem particularly progressive.

That the left has to import other countries’ problems and solutions shows things aren’t nearly as bad here as they’re trying to paint them.

If they were they’d have plenty of local examples, supported by facts and figures and wouldn’t have to rely on those from foreign academics who have little knowledge of how things work here.


No good reason to vote for Labour

April 8, 2013

Anyone tuning into Q+A yesterday in the hope of finding a good reason to vote for Labour would do would have been disappointed after listening to David Shearer.

Shearer said:

” Well, what we had been saying before is a whole programme of economic development, capital gains tax, and in the short term-

. . . Well, what I’m saying is that what we need to do is to grow the economy in a way that it’s not growing at the moment, and we’ll be talking about Tiwai Point in a little while…one of the big problems about – no, no, let me finish – one of the biggest problems about that is that the exchange rate is so low that we’re seeing many of our businesses actually going out of business because they’re not being able to succeed. We’re not putting our money in the profitable sector; it’s going into the property market because we don’t have a capital gains tax that will help us direct money into those areas. And if you’re wanting to raise money, then at least put money into businesses- invest in businesses through the incentives of capital gains, and that brings, obviously, money into the government as well.

The low exchange rate was a slip of the tongue. The capital gains tax wasn’t and increasing tax is not going to help economic growth.

Wood’s final question was was what Labour would do for a 26 year-old woman living in Auckland earning $65,000 a year, paying off a student loan and renting.

To which he replied:

Well, two things – first of all, we would have a healthy home guarantee to make sure that where she’s living, in the rental accommodation that she’s living in, is actually up to scratch; it’s both heated and it’s insulated. The second thing that we would do is we’re building 10,000 houses, affordable homes, a year, and that would enable her to have an opportunity to get on to the housing ladder. So there are two specific things that I believe that would help that case.

That’s at best underwhelming and would be even less attractive with a capital gains tax which has done nothing to stop house prices rising steeply anywhere else.


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