All jobs not equal

November 9, 2015

Labour’s proposal to use the government’s $40 billion in buying power to create jobs and back local businesses by requiring suppliers to make job creation in New Zealand a determining factor for contracts might be good politics but it’s bad policy.

The government, like any other entity, should be guided by price and quality when buying goods and services.

Unless businesses can adding job creation while competing on both of those factors, the requirement is a subsidy by another name.

If a future Labour-led government pays more, or accepts lower quality, to purchase from a business which creates more jobs it will not be not using public money wisely.

It will  be spending more than it needs to and to do that it has to take more tax, some of which will come from businesses with which those subsidised might be competing.

It could also lead the businesses which get the subsidies into difficulty when the government funding runs out and they find themselves with more staff than they can afford.

All jobs aren’t equal. Those created by government requirement are more expensive and less sustainable than ones created by businesses through their own efforts.

As Bill English said:

“We wouldn’t be chasing around the unemployment number [every] three months to three months – what we want to do is reinforce and encourage the industries that are doing well to invest, employ more people and grow.”

English said it was “not that easy” for the Government to create jobs, and any intervention would be unlikely to get value for money. . .”

The Wellington Chamber of Commerce is taking legal action against the City Council over its decision to require contractors to pay their staff the so-called living wage.

Labour’s policy is in the same feel-good- theory, bad-policy-in-practice territory.

The best thing a government can do for employment is keep a tight rein on its spending and enact policies which enable businesses to prosper which will give them the confidence to employ more people without a subsidy.

Quote of the day

October 1, 2015

. . . A strong focus of our policy is to make sure our markets work.

And over the last 30 years New Zealand has done a reasonable job of this.

Over the last seven years our labour market has been tested.

It has accommodated a significant recession in 2008, and a pickup in demand particularly in Christchurch following the earthquakes.

The labour market was able to respond quickly to those shifts in supply and demand conditions.

Today New Zealand’s proportion of the working-age population in employment is among the highest in the OECD.

Another area that is now working well is the energy market.

For a long time, New Zealand energy markets were over-regulated and poorly-regulated.

Extensive government ownership further stunted price signals.

For instance, water management in the hydro-electricity system was, compared to today, very poor.

And advertising campaigns to urge the public to restrict their energy use were more frequent.

In the last few months there have been a number of decisions in the energy industry which indicate a working market.

We’re shutting down excess capacity, and excess capital is being withdrawn and returned to the owners of that capital.

After years of litigation and legal contest over the rules, the energy market is now starting to work.

Which brings me to the housing market.

This is probably the largest market in New Zealand where the rules need to be reshaped.

The most evident indication of a problem is Auckland house prices.

I’m yet to find a housing market anywhere in the world where prices go up at over 20 per cent a year without stopping and then starting to come down again.

It may be that we are unique – but that seems unlikely.

So we’re concerned about the housing market.

Because it’s a large asset on the New Zealand balance sheet, worth around $600 billion.

And because what happens in our housing markets has a profound effect on every household.

I want to go through a number of the reasons why the Government worries about housing, why it matters to the economy, and some of the key issues around the way that market is regulated.

We have a better understanding of the significance of the planning process than we did in the past.

The process probably looks unexciting to most people – something busy-bodies and councils do.

But actually it’s the process by which one of our largest and most significant markets is regulated. And therefore we need to understand it.

As a group of young people, it is critical for you as potential future home buyers that we get this right.

There are three reasons why the Government is focused on planning – and each of these matter for you.

The first is that a housing market that is not properly functioning can have a significant effect on the macro-economy.

Over the last five years, the Auckland housing market has been the single biggest imbalance in our macro-economic system.

It takes around eight years for the housing market to respond to a shock to demand.

In part that is because changes to council plans can take years, in some cases over a decade.

Resource consents on a housing development regularly take 18 months, including pre-application times excluded from the official statistics.

When combined, those very real delays can exceed the length of the house price cycle.

The point is that when the supply of housing is relatively fixed, shocks to demand – like migration flows increasing sharply as they have recently – are absorbed through higher prices rather than the supply of more houses.

Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle.

And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed.

The resulting excess supply could produce a price crash.

This has been borne out by extensive studies in the United States following the Global Financial Crisis.

What they’ve found is that, across different markets subject to rules which vary by state, more-intense regulation of urban development is associated with higher house price volatility.

That is, the steepest price increases and the sharpest falls are in areas where regulation is strongest. 

The effects of planning rules can extend to the macro-economy.

Cities are one of the extraordinary inventions of the human race.

Studies have shown that cities are an engine room of growth. Incomes in cities are higher than elsewhere. That is one explanation for high rates of urbanisation.

Research indicates that when planning rules prevent workers shifting to higher-productivity locations, then there is a cost in terms of foregone GDP.

It’s only relatively recently that economists and politicians have understood the scale of those effects.

So when we’re talking about something as apparently dry as the Auckland Unitary Plan, we’re talking about a set of rules that will have a major impact on the city, on current and future residents – but also on the wider economy.

The second reason we focus on planning and its consequences is that poor planning drives inequality.

In my view, poor urban planning is one of the significant drivers of inequality.

Poor regulation of housing has the largest proportionate effect on the lowest quartile of housing costs and rents.

So when we’re having the debate about whether there is sufficient land available, we have to recognise that the people who lose the most from getting that decision wrong – and who stand the most to gain from fixing those decisions – are those on the lowest incomes.

Income inequality in New Zealand has been flat for 20 years, but the gap between incomes measured before housing costs and after housing costs is growing.

Housing costs are becoming a larger proportion of incomes – and that matters the most at the bottom end of incomes among people who have few choices.

And there are other measures of the effects on low-income households.

Twenty-five years ago, around 30 per cent of new homes coming into the market were priced in the lowest quartile. Another 30 per cent of new homes were priced in the upper quartile.

Today, only 5 per cent of new homes are priced in the lowest quartile. Nearly 60 per cent of new homes are priced in the upper quartile.

The new supply of lower-priced, affordable housing has dried up.

There are parts of Auckland where no new houses are entering the market priced at the affordable end of the market.

It is not surprising to see prices and rents rising disproportionately at the bottom end given this lack of supply.

Planning is often seen a public good activity that must address the needs of those who are most-vulnerable and have the lowest income.

In fact there is a strong argument to say it does exactly the opposite.

Poor planning favours “insiders” – homeowners – on high incomes and who have relatively high wealth.

Developers have told me that in Auckland they need to build a house worth $600,000 to make a development commercially viable.

That’s because it is difficult to build cheap housing on expensive land – particularly in view of the planning rules.

Those rules include urban limits, minimum lot sizes which prevent subdivision below a certain size, and maximum site coverage rules which prevent a house covering more than a certain proportion of the lot.

Working in combination, these rules reduce opportunities to develop affordable homes.

Now that planners are recognising these consequences, they are now creating even more rules to offset these effects; for example by requiring some developments to include up to 20 per cent affordable housing.

That is implicit recognition that planning rules have driven the costs up so much that another rule is required to offset it.

The impact of these rules on inequality, and on household incomes, leads to a third reason for why the Government is focused on the housing market.

That is the fiscal cost to Government.

As households have the proportion of their income spent on housing grow, the political pressure goes on governments to fill the gaps.

Today we spend $2 billion each year on accommodation subsidies. 60 per cent of all rentals in New Zealand are subsidised by the Government.

The state owns around $21 billion worth of houses.

One house in every 16 in Auckland is a Housing New Zealand property.

Many of these are three bedroom houses on quarter-acre sections only a few kilometres from the CBD – a massive misuse of scarce land. And all at the taxpayer’s expense.

So these are the reasons why the Government pays attention to the housing market and issues stemming from poor planning. . . 

As we get more information about what actually happens, often we find planning doesn’t achieve what people think it is achieving.

Planners and councils have a very difficult job in planning our urban areas.

Cities are incredibly complex systems. They are the product of millions of individual choices.

The idea that a small group of people could understand what choices we’re making is asking too much of them.

Not because they are in any way incapable. But because the task is overwhelming.

The Auckland Unitary Plan is 3,000 pages long.

It’s trying to regulate everything from the size of bedrooms to biodiversity in the Waitakere Ranges. No one person could possibly understand all the trade-offs in that plan.

Which means many of its effects will be certainly be unintended.

Planners can’t know everything – so of course they can’t be perfect in making trade-offs on our behalf.

Successful planning requires an understanding of its own limitations.

One of the things that needs to change is extra accountability and transparency.

Your prospects of being able to buy a house are directly related to the decisions made by planning officials about the availability of land, the environmental standards they apply to building, and the way infrastructure is allocated.

It’s very difficult to understand how planners do that, even though the consequences for the community and the economy are significant.

Central government has had the opportunity to sit alongside councils to understand how they make their decisions.

Some of those decisions appear quite arbitrary.

They can be driven by the tastes of individuals who have the power to make decisions.

Some decisions are contradictory within one planning system. Decisions might not fit together. Urban designers, for example, don’t always see things the same way as a council’s engineers.

First home buyers will be subject to rules which are not transparent and cannot be known in advance.

One of the areas this is most apparent is infrastructure.

Like central government, councils have historically made decisions on substantial long-term infrastructure projects with a minimal understanding of costs and benefits, and how the infrastructure will be supported over time.

Like central government, councils do not always know a lot about their infrastructure. And therefore they don’t know how to price it.

Pricing infrastructure is difficult. The nature of the asset makes it difficult to price. How do you price a stormwater system?

But that pricing matters. One of the big issues for getting a more-flexible supply of land is connecting the financing of the next piece of infrastructure with the value of the land it services.

Land is made more valuable when it is serviced by infrastructure. Infrastructure financing may sound a rather dry topic – but it is fundamental to allowing a city to grow.

Because if planners believe infrastructure supporting growth is too expensive, they’ll be too reluctant to release land for development – up or out.

That’s not a criticism – it’s an observation.

The funding base for councils is increasingly people on low fixed incomes. That is a product of an ageing population.

So you can understand why councils are under pressure not to expand if they think an expanding city is going to push up rates for existing ratepayers.

Councils need clear funding models so that development worth having can occur and future homeowners and current renters who might want to buy are taken into account.

So that’s a brief overview of how important it is that housing is regulated in a way that enables flexible supply, and I hope some indication of the progress we’re making.

That progress is necessarily slow, because these issues are complex.

If we better understand the economics of what is happening we can make better choices about housing regulation.

And that depends on one of the most important parts of public policy, which is the institutional arrangements by which those decisions are made.

That means looking at the incentives confronting an individual sitting in a council when making a decision about whether to allow a new subdivision.

We need to understand the incentives councils are reacting to. 

Next month the Productivity Commission will produce a further report on the regulation of land supply. It will be another input into further, ongoing improvements in this area.

And we are seeing new thinking on a range of issues affecting housing, including from councils.

Often politicians are accused of being focused on the short term. That’s one of the reasons this issue has never been dealt with properly in the past.

The Government is taking a long term view.

All of the things I’ve talked about today will take 10 to 15 years to sort out.

So it’s important that a broad group of people understand our single-biggest asset class – the most-important asset most of us will own – how is valued, how it is regulated, and how it can contribute to our general welfare.Bill English

Quote of the day

September 10, 2015

“But fundamentally that is a choice for the shareholders of the company. So the owners who are the farmer shareholders have had quite some time to look at the issue, various attempts to raise the capital.

“The New Zealand farmers who are shareholders have total control over that business now, and it is in their power to keep control over it, so we can’t really force them to own a business if they don’t want to own it.”

English said some of the company’s owners believed the business was a strategic asset and one that should remain in New Zealand hands, but for that to happen the necessary capital needed to be found.

“The real test is not whether people have an opinion, it is whether they are willing to put the money up.” –  Bill English on the suggestion the government should interfere in the ownership of Silver Fern Farms and that it should not be sold to overseas interests.

Rural round-up

September 9, 2015

Bright Foods tipped as Silver Fern bidder – Fran O’Sullivan:

Chinese Government backed Bright Food is understood to be the party which has been in negotiations with Silver Fern to take a stake in the NZ meat company.

Bright is a wholly Government-owned State Owned Enterprise.

But the negotiating vehicle is understood to one of Bright’s four listed subsidiaries. One of those subsidiaries – Bright Dairy & Food – took a majority stake in Canterbury milk processor Synlait Milk for $82 million in 2010.

Late last week speculation suggested the proposed deal would be announced today by Silver Fern Farms. . .

Waikato farmer wearing undies and gumboots chases burgler – Florence Kerr:

An attempted robbery was thwarted by an angry Waikato farmer who chased down the not-so-clever burglars wearing his undies and his gumboots.

Fed-up with continued thefts from his and neighbouring farms, Ohaupo farmer Arnold Reekers was forced into action in the early hours of Sunday morning when he heard his quad bike beeping as the thieves attempted to hot-wire the vehicle.

And despite having a knife pulled on him by the would-be thieves, Reekers wouldn’t hesitate to do it again saying continued thefts would drive farmers to take up arms despite pleas from the police for people not to take matters into their own hands.  . . 

Agility to drive value – Hugh Stringleman:

Fonterra chairman John Wilson has hit back at repeated criticism the huge co-operative has lost its way or not delivered on the promise it once held.

“I do sense the frustration of farmers with critics who come out of their holes when global milk prices are low,” he said ahead of the annual results release on September 24.

Wilson is one of three farmer-directors who retire by rotation this year to face the farmers’ vote in October. . .

New Zealand sheepmeat – maximising the cut:

Softer overseas demand for New Zealand sheepmeat – particularly out of China – which has curtailed New Zealand sheepmeat producers’ returns in recent months, has largely been driven by decline in demand for the forequarter portion of the carcase, says agribusiness specialist Rabobank in a recently-released report.

The report, New Zealand Sheepmeat: Maximising the Cut – Breaking It All Down, says it is important for producers to understand the breakdown of the animal and market demand for specific products as it ultimately determines the farmgate price. 

“While farmers are paid on a per head or per kilogramme basis, the price they receive is calculated from the summation of all the products derived from the animal – from the extensive array of cuts, to the offal, co-products, skin and wool,” says report author and animal protein analyst, Matthew Costello. . .


Foreign investment decisions could be fast-tracked – Brook Sabin:

The Government is considering speeding up foreign investment decisions, but Finance Minister Bill English is giving a cast-iron guarantee the rules won’t be watered down.

The Overseas Investment Office (OIO) considers whether to approve high-value and sensitive land investments from overseas buyers. It then makes a recommendation to the Government, which ultimately decides whether the sale can proceed.

The most high-profile sale currently before the OIO is the 14,000ha Lochinver Station, which China’s Shanghai Pengxin wants to buy. The application has been held up for more than a year, but the Government is finally close to deciding whether it will go ahead. . .

Investment reduces AsureQuality profit:

AsureQuality posted a 9% drop in 2015 annual profit and expects a further decline in 2016 as the state-owned food safety company steps up investment for future growth.

Profit fell to $11.4 million in the 12 months ended June 30, from $12.5m a year earlier, the Auckland-based state-owned enterprise said in a statement posted on the Treasury website. It expects profit to decline further to $10.6m in 2016 before increasing to $12m in 2017, according to its 2015-2018 statement of corporate intent. . .

Organic farming is actually worse for climate change than conventional farming –  Deena Shanker:

Organic food is booming right now, as more and more people choose what they perceive to be healthier, more environmentally friendly food.

But a new study published in the June issue of Agriculture and Human Values suggests that organic farming, as it currently stands, is not as sustainable as it could be, and when done on a large scale, even produces more greenhouse gases (“GHGs” are heat-trapping compounds that contribute to climate change) than its conventional counterpart.

To determine the difference in emissions of organic agriculture versus conventional, University of Oregon researcher Julius McGee used state-level data, available through the United States Department of Agriculture and the Environmental Protection Agency, that showed agricultural GHG emissions from 49 states from 2000 to 2008. . .  Hat tip: Utopia

Biofilms in the Dairy Industry:

Recent high-profile contamination scares within the international food industry have highlighted the need for best practice when it comes to dairy manufacturing. After 15 years of research into dairy biofilms, there is now a cornerstone publication for a better understanding of the current science, and ways to reduce the occurrence of biofilms associated with dairy manufacturing.

Biofilms in the Dairy Industry provides a comprehensive overview of biofilm-related issues currently facing the New Zealand and international dairy sector. . . 

$1.6b better invested elsewhere

August 19, 2015

Stuff reports that the partial privatisation of Landcorp is on the cards because Finance Minister Bill English is concerned about its level of debt.

. . . English indicated Landcorp may sell farms to improve its balance sheet, but while he would not rule out partial privatisation he said the Government was not at that stage yet. The Landcorp board had looked at ways to raise capital, but not a float or big sell-offs.

“We are not ruling anything in or anything out because we aren’t actually dealing with propositions at the moment.”

But there had been discussions to ensure it was sustainable. He said he had confidence in the board.

He said he “would expect Landcorp to sell off farms if that’s part of maintaining the sustainability of their business”. . . 

Selling the company as a whole would be difficult if not impossible, given its value.

The management arm could be sold separately and farms gradually sold off until the company disappeared but that would be politically unpalatable which is unfortunate.

Think of the good $1.6 billion could do if invested in research and development, infrastructure, education, health, reducing debt  . . .

Now think about the benefits of tying that amount of public money up in farm land.

The only one I can come up with is as a land bank for treaty settlements but I don’t think settling all those still unresolved requires 137 farms covering 158,394 hectares spread throughout New Zealand.

The company made an operating profit of just $1 million in the first six months of this financial year which is an abysmal return on investment.

Even in good years, the return on investment is modest which is not unusual for even the best farmers.

Landcorp farms are well run. They have a good record for staff training, environmental protection and enhancement, and genetics.

But that still doesn’t justify tying up $1.6 billion which could provide much better value if invested elsewhere.

Plan A is working

August 18, 2015

One message from CEOs last week was the government needs to form Plan B in case the dairy slump worsens.

Lisa Owen put this to Finance Minister Bill English on The Nation and he responded:

. . . We run economic policy that underpins a flexible, resilient economy, so if prices are down in one area, we would expect people to— we’ve got a set of rules that enable them to react fairly quickly to that, and we don’t try and hide the message the world is sending us, for instance, about dairy prices. And lots of other countries, they’re increasing subsidies to farmers in order to brush over and hide that price signal. So this economy will diversify if there are other markets which are willing to pay more for our products. That’s where the investment will flow. And the good news on the horizon is that the US economy is recovering. It’s the world’s largest economy. It’s showing signs of sustainable growth. And that New Zealand businesses are responding to that positively, and I don’t agree with politicians—

But, Minister, that’s your plan A. That’s your plan A. Where’s your plan B?

Plan A is a flexible, resilient economy. If plan B is about politicians sitting on the sideline deciding where hundreds of millions of investment should go next, then we’re not interested in that sort of plan B. It will fail, as it’s failed in the past.

But business people who are on the front lines – 75% of the top business minds in the Mood of the Boardroom – they want you to have a plan B. Are they wrong?

Well, I’ve asked them about what their plan B is, and none of them have a plan B. They’re certainly inviting—

Maybe they’re relying on you for plan B, Minister.

They’re certainly not inviting politicians to say, ‘Right, we’re going to shift a couple of hundred billion— a couple of hundred million of investment from industry A to industry B.’ They are backing the Government approach, which is to ensure that we keep our costs down, the Government invests in infrastructure, because no one else can do that, we work on the pipeline of skills into the labour market so there’s people there that they can employ, and they make their risky commercial investment decisions, and that’s what they’re doing right now. Right around the country, businesses will be thinking about where to direct their investment, given that dairy’s not looking so good for the next year or two; tourism, wine, ICT is all looking better for the next two or three years. And they’ll make those decisions a bit more precisely and more sensibly than government would. .  .

Plan A is what got New Zealand through the GFC and the economy growing again.

We need more of it  – lower government spending, concentrating on addressing the causes of welfare dependency, investing in education and infrastructure, opening more trade opportunities . . .

That’s the business of government and private enterprise isn’t as Mike Hosking reminds us:

What’s a bloke buying a farm got to do with the government?
What has any person setting up a business got to do with the government?
When a shop closes is it the government’s job to mop it up?
When a factory down sizes… Is the govt supposed to do something?

Dairy, like all business products and markets is beyond a government scope.

A government is there to provide over arching policy direction… Like tax and trade deals and welfare.

It’s not there to milk the cows, man the tills and set the price for commodities. . .

If the CEO’s know what’s good for them and their businesses they won’t be asking government to get involved in them.

We don’t need Plan B and we definitely don’t need government minding the business of business.





The opportunity to change, or not

August 14, 2015

Parliament has voted to give us the opportunity to change our flag, or not:

New Zealanders will have their say in choosing the New Zealand flag after legislation enabling two postal referendums was endorsed by Parliament, Deputy Prime Minister Bill English says.

“The passing of the New Zealand Flag Referendums Bill, with the support of four Parliamentary parties, will secure New Zealanders their first opportunity ever to vote on the flag that best represents them and our country,” Mr English said.

Ah the hypocrisy of Labour which went in to the election saying it would give us the chance to change the flag, and do so through two referendums exactly as enacted, but voted against the legislation.

The first postal referendum is planned to take place between 20 November and 11 December and will empower voters with the opportunity to rank four alternative designs.

The most-preferred design from that first referendum will then go to a second binding referendum in March, where voters will democratically choose between the status quo and the most preferred alternative flag.

Public discussion on the merits of the flags on the longlist is welcome and appears to be vigorous.

The Electoral Commission is well-advanced in its preparations for the referendums, Mr English said.

Prime Minister John Key puts the case for changing the New Zealand Flag:

You can also listen to him put the case for change to Simon Barnett and Gary McCormick here.

There’s some information on flags of the world here.

And John Lapsley also puts in the case for change in the present flag speaks of another time, country:

I feel quite ill when conscience demands I write a sentence of unqualified praise for our political masters.

But helped by a gumboot shiraz and a Panadol, we man up, and get on with it. Here goes:Despite popular thought to the contrary, the Government has made a first rate job of planning the new flag referendum.

And if you believe it’s wasted $25million boring the populace, you’ll soon be proved spectacularly wrong.

True, the first months of the Flag Consideration Project have been as dull as its name. But that was to be expected while they did the dreary spade work of research and consultation. Things don’t get interesting until we set eyes on the possible new flags.

That’s now about to happen. This month the project’s panel of luminaries releases its ”long list” of 50 plus flags winnowed from 10,000 odd entries. (So much for alleged disinterest.)

After a month’s public palaver, they produce a four flag shortlist. Before Christmas the nation will vote to choose one that runs against the present flag in a March referendum.

Come the new year, you won’t escape the pub or the proctologists’ ball without a flag argument. It will be the media’s subject du jour. Talkback jocks will jabber. There will be no place to hide, as we enjoy democracy at its most glorious.

I was listening to talkback on Tuesday, the day after the long-list was announced, and the flag was the major topic.

Let me nail my colours to the mast. I’m for a new flag. I respect our present one, but it speaks of another country – the very different New Zealand of the past. It symbolises origins we’ve grown beyond.

The blue Southern Cross flag with its dominating Union Jack, is our third. We were just a British colony when it was introduced in 1902, but soon to become (dear God) a ”dominion” – from the Latin ”Dominium”, meaning a country subject to another’s ruler.

We may find the term insulting, but our great grandparents didn’t. In 1902, nearly half had wet their first nappy in the British Isles. (Today’s UK born figure is just 4%.) I recall my own grandparents’ wistful immigrant speak about ”mother country” and ”home”.

My mother, a third generation New Zealander who had never been further than Australia, also spoke of Britain as home in the 1960s, though if I recall correctly not after she’d been there in the 1970s.

Until the 1950s, much of our art and literature was obsessed with a great puzzle – what it really meant to be a New Zealander.

Mired in culture cringe, and in awe of anything London, a Union Jacked flag seemed properly parental to a country whose nationhood was still in short pants.

That parent turfed us out of home in 1973 when it joined the European Economic Community, and left us high and dry. Yet our old master’s insignia still sits proud – top left on our flag.

We hear three main arguments for keeping this flag.

It’s claimed change would dishonour servicemen who died fighting for the flag. This is nonsensical – the Kiwis we honour on Anzac Day died serving their country. I doubt the flag crossed their minds.

Some Maori fought under the Union Jack in the land wars, some fought against people fighting under it.

The 1900 medal commemorating the Boer War shows a version of the United Tribes’ flag and New Zealanders fought under the Union Jack in World War I.

It is argued that removing the Union Jack somehow disrespects the country’s Queen. Well, actually, it doesn’t, and the Queen has her own distinctive Royal Standard. The Union flag is her country’s banner.

I hadn’t heard that argument but most other Commonwealth countries have changed their flag without in any way disrespecting the monarch.

The third argument for the status quo is that the flag is historic. That’s true, but also the core of the problem. The flag tells the world the British part of our history remains paramount to us today.

And this is a flag adopted when the colony still excluded Maori from its main census count – a flag which ignored and obliquely insulted our Polynesian past. Yes, it’s that far out of touch.

Fiji is about to remove the Union Jack from its flag, leaving only three of the 49 self governing Commonwealth countries that keep it – us, Australia and those parts of Tuvalu which remain above water. It’s right to value the British part of New Zealand’s heritage.

But it’s wrong that in 2015 we keep a different, distant, country’s flag as the most eye catching feature of our own.

This denigrates us, and it does it very directly. Our country has built its own identity. It’s time our flag reflected it.

I won’t definitely commit to voting for change until I know which of the new designs I’d be voting for.

But I am open to the idea of changing our current flag which recognises only part of our past:

 The Union Jack in the top left-hand corner of the Flag recognises New Zealand’s historical foundations as a former British colony and dominion.

And was designed in Australia to feature Crux Australis (the Southern Cross) by a man who’d never set foot in New Zealand, for a former Queensland governor who was just passing through.

I’d prefer one which is recognisably ours, that may or may not acknowledge the past, and does reflect New Zealand now and where we want to go.

And I am excited about the idea of a flag that is chosen by us.

How many other governments have trusted their people to choose their own flag or vote against change which will be an option in the second referendum?


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