Does Labour have a research unit?


Political parties get public funding for parliamentary support services.

That could and usually does include researchers.

They’re the people whose duties ought to include looking carefully at policy proposals.

Does Labour have a research unit and if so was the xenophobic policy barring all foreigners except Australians from buying houses examined by it?

If so why didn’t they see two large fish hooks spotted by a journalist and a lawyer?

Not long after the policy was announced for Rob Hosking pointed out the numbers of non-resident “foreigners” owning houses David Shearer was quoting included ex-pat New Zealanders.

Shortly after that Stephen Franks pointed out the policy almost certainly breached the Free Trade Agreement with China:

. . . Under Article 138 of the NZ China FTA (National Treatment)  all investments and activities associated with such investments made by investors of both parties must be treated, “with respect to management, conduct, operation, maintenance, use, enjoyment or disposal”  no less favourably than investments of its own investors. The list does not include “acquisition” or similar words.

So under that provision a Chinese house buyer must be treated the same as a New Zealander after acquiring residential property, but the protection does not extend to prospective buyers. Whew for Labour!

But wait – another Article (the most favoured nation clause) commits New Zealand not to pass law that discriminates against Chinese investors in comparison with other overseas investors (such as Australians).

Article 139 requires that investors of [China] be treated no less favourably than investors of any third country [Australia] “with respect to admission, expansion, management, conduct, operation, maintenance, use, enjoyment and disposal” of investments.

So Chinese would-be  investors do not get direct rights to insist on investor equality but they can’t be treated worse than Australians.

Labour has said Australians would still be allowed to buy residential property under their policy. This would breach Article 139. . .

. . . What would happen if Labour got the numbers to legislate such a policy irrespective of the FTA? Parliament can, after all, legislate contrary to international law.

There would be serious legal, economic and political ramifications. The Chinese government could invoke the dispute settlement procedures in the agreement.  NZ exporters may lose their benefits under the NZ China FTA. NZ’s international standing as a good treaty partner would suffer. . .

The FTA was signed by a Labour government , several members of which are still in the Labour caucus.

What did they have to say about the FTA and Labour’s xenophobic policy?

. . . Their Leader said this evening to NewsTalk ZB’s Susan Wood that his colleagues responsible for the China FTA tell him it was not meant to prevent NZ from barring investment it does not want.

If that was what they meant, it is not what they signed. . .

The sooo boring detail of deals that stitch us up may have eluded the politicians who actually signed them, but until they are properly understood Mr Shearer, stop digging.

Did his colleagues not understand what they signed, or did they understand but fail to explain the fine print to their leader?

Either way it reflects poorly on them.

It also raises questions about the party’s research unit. They’re the ones who are supposed to look at boring details.

Did anyone bother to run the policy past them?

If not why not?

And if so why did the researchers fail to spot the flaws uncovered so quickly by a journalist and a lawyer?

Could it be the research unit is as disillusioned and dysfunctional as the caucus?

Rural round-up


Korean visit to address fears about trade direction – Marie

Prime Minister John Key heads for South Korea on Thursday for an official visit warning that New Zealand’s fifth biggest trading partner will slip down the rankings without a free trade agreement.

War commemorations will be a central feature of the visit, with 30 New Zealand veterans joining Key’s entourage to mark the 60th anniversary of the Korean War armistice. 

Key said outside those events, the priority was to make progress on reaching an FTA. . .

Farmer Confidence Rebounds, New Survey Finds:

Federated Farmers’ New-Season Farm Confidence Survey, undertaken at the start of the 2013/14 season, has shown a major turnaround in farmer confidence.  This result is in keeping with other recent farm and business confidence surveys.

“Farmers are showing a lot more optimism in both the wider economy and individual farm prospects,” says Bruce Wills, Federated Farmers President.

“You could say farmers are in recovery mode but this bounce back comes off a low base.  There is still a large gap in the sentiment of dairy farmers when compared to the other farming sectors.

“Six months ago, farmers were fairly negative about the wider economy and were very pessimistic about their own profitability.   This was particularly the case for sheep and beef farmers. In contrast, dairy farmers were feeling more optimistic than they had been at this point last year [July 2012], thanks mainly to better dairy commodity prices and growing conditions. . .

Alliance lamb in Oliver’s Russian eatery – Alan Williams:

Alliance Group lamb from New Zealand will be on the menu at the new Jamie Oliver restaurant due to open in Russian city St Petersburg.

The contract was a good boost to the business Alliance had built with Russian food service companies and restaurants over the past 12 years, marketing general manager Murray Brown said.

It highlighted the growing status of the group’s Pure South brand as a leading red-meat export, he said. . .

Eliminating wool’s dirty secret:

With New Zealand’s main-shear approaching, Federated Farmers and the NZ Shearing Contractors Association are backing moves to cut the woolshed contamination of wool. If successful, it could boost farmgate returns by a couple of million dollars each year.

“When you are dealing with a $700 million export, cutting wool contamination translates into a big opportunity for fibre farmers,” says Jeanette Maxwell, Federated Farmers Meat & Fibre spokesperson.

“As a farmer, the easiest way for us to increase our returns is to focus on what we can control. Woolshed contamination is a perfect example of this. . .

Head in a bucket – he does that every morning – Mad Bush Farm:

 He’s old, muddy, grumpy and he wasn’t making it any secret he wasn’t going to be sharing his breakfast with Ranger and the other little horses. As for me well the black eye has at last waned to a faded reminder of Muphy’s visit last week to the farm. The cows and naughty little Tempest, are finding out the hard way that an electrified wire is now on the road fence. We’ve had a few fine days, it’s still a bog hole here. My complaints are going unheeded by Mr Winter. He won’t be leaving until the end of August – darn. I’m going back to the mud now to complain some more or mayube I’ll just go and have a coffee instead

Talking of horses I found this beautiful tribute to the Arabian horse done with clips from the Black Stallion and other films. . .

Jousting for poll position – Milk Maid Marian:

Scuffles broke out right across the paddock as the weak winter sun lit the stage for a bovine pugilism festival. The cows were feeling magnificent and, unable to contain their energy, were ready to take on all comers.

The kids and I love watching the cows “do butter-heads” and the cows seem to love it, too. For every pair or trio engaged in warfare, there will be a group of curious onlookers and one scuffle seems to inspire more outbreaks.

Does butter-heads have a serious purpose though? Yes, it does. The herd has a very structured pecking order. Cows come into the dairy in roughly the same order every milking and the smallest and most timid are inevitably last. Mess them up by splitting the herd into seemingly random groups for a large-scale vet procedure like preg testing and you can expect trouble. . .

Trade is the key – first steps to FTA with Chinese Taipei


Quote of the day:

Trade is about specialization. Specialization is the heart and soul of productivity growth, which in turn is the key to the elimination of absolute poverty –  Trade Minister, Tim Groser in his addres for the annual Ralph Hanan Memorial Lecture.

This contradicts the widely held view many on the left harbour about the advantages of protection and trade barriers.

The address incldues other gems:

More and more people and communities on the planet have discovered that the competition for resources does not need to involve war, but is better organized through mutually profitable exchange, buttressed by the rule of law, both domestic and international.

What has changed is not human nature, but technology. Because of technology, the opportunities for trade are now extraordinary. It is rapidly falling transport and communication costs that have created the phenomenon of the global supply chain . . .

When transport was expensive, trade had to be in highly priced goods to justify the expense of getting them to market. Now transport costs are relatively low it is cost effective to send low price goods within and between countries.

The industrial model of vertically integrated production – you try to make everything – is almost certainly the wrong model. “100% made in New Zealand”, while a crowd pleaser as a slogan, is absolutely the wrong slogan for higher real wages and a prosperous future.

There will be honourable exceptions – goods that are from top to bottom nearly 100% NZ value added and yet remain internationally competitive in the process. Further, given our extraordinary primary resource strengths, there may be rather more such successful examples in New Zealand’s future than would be the case in most developed countries. But by and large, we need to move beyond this idea of “100% made in New Zealand” to embrace the extraordinary opportunities of the global supply chain.

Local production and independence have their place but they are not always the right model.

This is where New Zealand needs to position itself – as a small, diverse and sophisticated producer of ‘bits’ in the global supply chain. Trade in intermediate goods is now some 60% of world trade; trade in intermediate services is even higher, according to OECD definitions.

The examples he gives is aircraft. We can’t make and export them but we can, and do, manufacture some of the parts which are needed to make them in other places.

The address also highlighted the inefficiency, high costs and general stupidity of the way our economy used to operate:

Through rigid import licensing and massive tariff barriers, we force-fed vertically integrated production in New Zealand for the domestic market. I remember that when we started to scope out the CER negotiation, our exports of manufactured goods were some pitifully small percentage of total NZ exports.

If we could not make it 100% in New Zealand, we had a simple solution: we sent officials and business people to Tokyo or Detroit and said: “pull your TV, Sony-san, to bits and export the bits to New Zealand where we will re-assemble them. And while you are at it, Mitsubishi-san and Mr Ford, send us bits of your cars so we can re-assemble them here in NZ”.

It was a money-go-round and subsidy racket made possible only by having a highly successful mono-cultural agricultural export economy with unlimited access to the middle class of what had been the most powerful country in the world – Great Britain. The moment the UK joined the then EEC, the skids were under us. It was the start of a massive challenge to NZ to build new political, business and trade policy platforms.

It’s hard to believe that some political parties would take us back to days.

If you sit down and ask yourself why have we not made a faster adjustment to this new trading world, and why all those OECD comparative charts have us flat-lining from the mid 1970s you may be underestimating the gulf between the reality of NZ trade strategy yesterday and today.

But ladies and gentlemen, don’t throw in the towel yet on this small but fascinating country of ours. We have engineered a revolution, if you are allowed to use that term to describe something that has required a quarter of a century. And this lies at the heart of my deep belief, that New Zealand is now poised to enter a new period of highly successful wealth creation over the next quarter of a century.

As with our earlier success, if we make it happen, it will be based around superior export performance, and again to the middle class of the world’s most important economies as it was in the early 20th Century. It is just that the power has shifted and we have needed to shift with it.

He then gives the case for rational optimism:

All the ingredients are there and we just need to put them together, piece by piece. I have concentrated tonight on our future as a niche manufacturing and services exporter, not agriculture. Nothing alters my view that agriculture is going to play as large a part in our future as it has in our past and our relationship with the emerging economies lies at the heart of that judgment. I think Sir Graeme Harrison, Chairman and founder of ANZCO, is absolutely right with his metaphor: agriculture is New Zealand’s Silicon Valley. The choice was never agriculture or non-agriculture. We need superior exporting performance from all sides of our economy to build our future.

Quite – agriculture is one of our strengths and given our natural advantages in converting grass to protein for a hungry world, it will continue to be so. But we shouldn’t have all our eggs in the agricultural basket.

Of course we need to see our way through this current deeply difficult international situation in the developed world, and we will. And of course we will need consistently sophisticated leadership from our political, business, farming and technology leaders to build successfully on this new trading platform. These leaders need to be looking through the front windscreen to where we are going as a country, not the rear-vision mirror at where we have been.

Central to this new trading platform are our trading relationships with the emerging economies. The bedrock here is our relationship with Australia, the CER and the wider economic relationship around the CER.

The next most important trading partner is China.

We are uniquely well placed to build that economic relationship, because we are the only developed country in the world to have a comprehensive FTA with the world’s second largest economy.

But we also, intriguingly, are the only country in the world to have a matching comprehensive FTA with the second element in the wider Chinese economic area – our FTA with Hong Kong, which we signed in 2009. And tonight I am delighted by the news that we have initiated the first step that may lead us in a year or so being the first economy in the world, other than China itself of course, to join the three points in the Chinese economic triangle together.

Tonight I have issued a brief press statement welcoming a sparsely worded press release from the New Zealand Commerce and Industry Office in Taipei (NZCIO) and the Taipei Economic and Cultural Office in Wellington announcing that they had agreed to explore the feasibility of an economic cooperation agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei).

To use its WTO nomenclature, Chinese Taipei is an important trading partner for New Zealand and even after its WTO accession maintains a number of high barriers to our exports.

New Zealand signed a FTA with China in 2008 and a Closer Economic Partnership with Hong Kong in 2009. The FTA with China has been spectacularly successful.

I am hopeful that any eventual economic cooperation agreement with Chinese Taipei will see substantial growth in exports to this important economy. It is not just important for our goods exporters. It is an important source of tourists, students and investment as well.

This is both a trade and diplomatic coup. Relations between Beijing and Taipei are at best delicate and talking to one has in the past required ignoring the other.

That our FTA with China has been so successful and that we are now taking the first, albeit tentative, steps towards economic co-operation with Chinese Taipei is internationally significant.

Bad old days reminder why we need free trade


The good old days weren’t so good when it came to trade as this cautionary tale from Tim Groser shows:

The year is 1986 or ’87. It was a period where NZ was locked into a bitter struggle with Europe over dairy. In Europe, this was the era of wine lakes and butter mountains – products of the vast agriculture surpluses built up by the then Common Agriculture Policy. It was well before Europe got serious about policy reform. Our dairy industry – as was the case with our sheep meat industry – had been set up as part of the UK food security system. Our supply chains had been fashioned to supply Europe and the European consumer. Markets everywhere else around the world were generally closed to NZ.

I was also Chairman in Geneva of a second-rate international organisation, now thankfully defunct, called ‘The International Dairy Agreement’. It was once defined by a famous French negotiator as ‘our (meaning EU) little OPEC with NZ’. It was an agreement designed to enforce internationally agreed minimum prices on key internationally traded dairy products. The Americans, furious at Europe’s manipulation of the Agreement, had walked out some years ago and were just observers. We hung in grimly, because it was literally better than nothing. Or so we had thought.

One day I woke up to be told that the EU, or EC as it was then known, had broken their minimum price agreement and dumped about a quarter of a million tonnes of milk fat, mainly AMF and butter, on the Russian market. So closed were world dairy markets, that in those dark days, Russia represented typically about 70% of the free global market for milk fats. It was a disaster for NZ, given the importance of dairy to our economy and the lack of alternative markets. . .

Free trade agreements by successive governments, and on-going negotiations for more open borders, have saved us from this sort of threat.

They have also provided us and other consumers in various parts of the world with access to more produce and greater choice.

FTAs slow but vital progress to prosperity


The announcement of a free trade agreement with Malaysia, our eighth biggest trading partner, is welcome news.

Prime Minister John Key said:

“Between 2004 and 2008 New Zealand’s goods exports to Malaysia grew by more than 80 per cent – double the rate for New Zealand’s export growth to the world over the same period.”

If we can achieve that without an FTA, the opportunities with one will be even better.

Trade Minister Tim Groser said:

“Malaysia’s large and growing population of more than 28 million people presents considerable opportunity for new and enhanced market access for New Zealand’s exporters, including in education, environmental, management consulting and veterinary services.

Fran O’Sullivan highlights the opportnuities for dairy prodcue too.

But it’s not just about goods and services, it’s also about attitude.

For generations we looked to the other side of the world, to Britain, and sent most of our produce there.

Now we are looking to markets closer to home. This is not just about trade, it signals a change in culture and a growing recognition of the importance of the Asia Pacific region.

Media manipulation


Goodness me, how surprising that on the day the privileges committee report into Winston Peters and the donations debacle is announced there is a major announcement on progress towards free trade with the USA and a make-muck revelation about John Key’s family trust shareholding in Tranz Rail.

Colin Espiner exposes the not so subtle hand of Labour behind it all:

What an amazing coincidence that three big stories would all break on the same day. Wasn’t it?

Um well no, not really. Because it turns out that Labour fed the story about Key’s share trades to TVNZ late on Sunday night for use on Monday, knowing that the privileges committee report was about to blast Winston Peters to smithereens. And Trade Minister Phil Goff leaked details of the FTA announcement to selected media – TVNZ, TV3 and Radio New Zealand – five days ago, on the condition they kept it quiet until yesterday.

Espiner gives credit where it’s due:

Labour’s tactics are not dirty or underhand. They are smart, vicious, and calculated. It’s how you win election campaigns. But it’s still worth pointing out that there was nothing coincidental about yesterday’s yarns.

It wasn’t coincidental, but did the media have to swallow the lines they were fed?

All of the stories were newsworthy so there was nothing untoward about the media running them, nor about the timing, because they wouldn’t have wanted to delay and let their competitors beat them.

Poneke asks if there was anything untoward behind the Dom Post’s decision to put the FTA and share stories on the front page and relegate the Peters report to page three. I tend to go for incompetence rather than conspiracy when people raise questions of media bias here, especially given, as comments on Poneke’s blog pointed out, the Peters story might have been considered stale and the other two were fresh.

That said, had it not been for Espiner’s blog, we might have guessed but would almost certainly not had it confirmed, exactly how Labour manipulated the media.

Roarprawn acknowledges that by offering him a bottle of wine. Keeping Stock  said this exposes Helen Clark as a liar again and No Minister is searching for the quote that will prove that.

Skills shortage biggest concern


Skills shortage was the biggest concern for the more than 2000 businesses which responded to Business New Zealand’s Election Survey.

Problems getting skilled staff, not being well positioned to innovate and concerns over the business environment including the Employment Relations and Holidays Act and ACC were the three big issues for respondents.

The education system wasn’t meeting the needs of 72% of respondents; 94% said more work was needed in apprenticeships and industry training and 91% said all school leavers should achieve at least NCEA 1 numberacy and literacy.

Problems mentioned included the quality of tertiary qualifications and stop-start immigration which are contributing to driving people overseas; the skills shortage is a symptom of underlying uncompetitiveness and and New Zealand economy isn’t growing enough high paying jobs so skilled workers go overseas.

The second biggest issue was innovation with 89% of respondents saying research & development credits are unlikely to lift the level of R & D; 54% want new policies to imporve access to venture capital and 54% said government assistance should be through a contestable fund.

The business environment was the third big issue. Under this category 71% of respondents said the dismissals provision in the ERA was below average; 54% said the ERA collective approach is the wrong way;89% don’t want laws for work-life balance and 65% want to open ACC to competition.

A flatter tax system was wanted by 64% of respondents; 62% want local government to stick to its core busienss; 55% support the FTA with China; and 73% said New Zealand shouldn’t be a world leader on climate change.

An NZ Herald report on the results is here; and the responses to Business NZ questions by political parties is here.

Lost way lost support


Invercargill MP Eric Roy has a shearing handpiece on the book shelf in his Wellington office. It’s to remind him where he comes from, why he’s in parliament and who put him there.

MPs who forget those things lose their way and that’s when they lose their supporters.

The Ex-expat  expresses this in a letter which would be instructional reader for all politicians. I don’t agree with all her points, but I am copying it below without comment because it’s a message from the heart which crosses political boundaries – give us something to vote for, not just something to vote against.

A Letter from a Labour Voter

Dear Labour,

I have confession to make, I don’t want to vote this election. You have no idea how much it pains me to make that admission not only because I have a number of friends who will contest this election under the Labour banner and I want them to do well, but because I genuinely believe that the best chance New Zealand has to succeed as a nation is through the re-election of a centre-left government. It’s just right now there doesn’t seem to be a party out there articulating a centre-left vision for the country.

And that’s what is missing from your constant bluster about ‘slippery’ John Key and his band of evil Hollow men with no policy, a vision for me and other left wing voters to vote for rather than a dystopia to vote against. Because the attacks, while fun and politically necessary on occasion, are hardly rousing stuff when that’s all you talk about and I must confess that I don’t bother reading your blog, The Standard, much because of it. It’s a shame because the Standard has interesting analysis on there from time to time but any lucid points are diluted by the sheer number of posts that attack John Key and National in even the most ridiculous of circumstances.

I suppose this negativity is likely a reflection of MPs and Ministers in Wellington who are probably scratching their head wondering why, after nine years of hard-fought funding increases and liberal reforms to New Zealand society, people aren’t dancing in the streets about all that you’ve achieved.

And to be fair to your administration, the New Zealand I returned to last year is a very different country to the one I left in 2002. The place seems so much wealthier than when I left. Not the kind of wealthy where millionaires live in secluded compounds just a few kilometers away from the kind of poverty and hopelessness that made me cry in so many parts of Asia. But a wealth that sees most of our population well fed, mostly healthy and highly educated, and most importantly working in real jobs rather than pretend work in order to receive an unemployment benefit. What I found the most amazing was how many large public infrastructure projects, like spaghetti junction in Auckland, which had been started in the 1970s and left to stagnate in the 1980s and 1990s have been slowly been completed in the past few years thanks to your administration. Likewise you get a thumbs up from ex-expat for concluding a huge number of significant treaty settlements and Free Trade Agreements.

But thing is, I and other voters still want more. The reason we want more is because we didn’t elect you to maintain the status quo, we elected you to build a better society and we know that there is still so much work to be done. I want to know why I’ve spent 18 months being dicked around by the health system for elective surgery I can’t afford to pay for privately and my health insurance policy won’t pay for either. I want to know why broadband in this country is so hideously slow, expensive and in many places non-existent. While we are at it, how come you haven’t gotten around to reforming our heinous abortion laws despite having a supposedly all-powerful women’s caucus?

Most importantly you started your tenure in office with a vision to use a politically incorrect term, ‘close the gaps’ between various sectors of New Zealand society. Sometime during your term in office you stopped talking about the vision even though you and the people who voted for you still believe in it. And while it has taken you nine years in power for that rich poor gap to close for the first time in twenty years, there are still huge gaps that need to be closed. Perhaps the most gaping is in education where we have a system that fails half of the Maori Boys that go through it. I don’t need to lecture on what happens to those boys later in life. But the thing is, the people who are voting for you need to know that reason we need to put money and new ideas into fixing this problem is not because it is ‘politically correct’ but because it is the correct political principle.

At the moment the other side seems to have large numbers of your voters convinced that tax cuts are the way to go to make their lives better. So much so you that you performed a political harikiri, a tax cut of your own, in order to do so. But as you rightly point out to National, you can’t cut tax without also cutting the government services that will hurt your voters the most. What happened to that vision and connection that filled us with such hope in 1999? I’m not sure about the others, but you lost me when the principle of ‘sustainability’ became the political issue that we were willing to burn so much of our political capital in order to achieve.

I hope that I’m wrong about all this and there’s a grand plan in Heather’s top drawer for the next three years that will inspire me and other people to vote you because we want to. Because right now I feel like I am casting my vote on the basis of loyalty rather than inspiration and that’s not really much of reason to drag myself to the polling booth at all.



PS. You overuse of the ‘slippery’ tag is right up there with the right’sLiarbour‘ for sheer irritation value.

%d bloggers like this: