If it were done

May 21, 2020

Macbeth was talking about murder when he said, If it were done when ’tis done, then ’twere well It were done quickly.

That also applies to leadership tussles and National leader Simon Bridges has made the right call in summoning his caucus to settle the matter on Friday.

Every day’s delay is a day more when the issue festers with all the negative media attention that accompanies it leaving little clear air left to hold the government to account.

I am not going to give my opinion on who should be leader.

I support the party and whoever leads it and will continue to do so whether that is Simon with Paula Bennett as his deputy or Todd Muller and Nikki Kaye.

But I will say that whatever the outcome of the caucus vote, all MPs must be loyal to the leader and the party.

The leaking, the criticism and any show of disunity and disloyalty must stop.

Just a few months ago National was polling higher than Labour.

What changed was Covid-19 and the response to it.

The government’s abysmal record of doing very little it said it would until then has not changed.

KiwiBuild, child poverty, climate change  . . . it’s been lots of talk and very, very little action.

What has also changed is the economy.

The lockdown flattened the Covid curve and in the process has flattened the economy.

The government has voted itself so much money in response most of us can’t comprehend the amount. But worse, it doesn’t have a clear plan on how to spend it and at least as important, it doesn’t have a plan on how to repay it.

As Heather Roy explains in a letter to her children:

. . .By way of explanation, this is why I am sorry about your inheritance. Debt is what you have to look forward to and growth will take some time to return. In the short-term, New Zealand is facing a large rise in unemployment, predicted to peak at nearly 10 percent before falling back to 4.6% in 2022 (optimistic I suspect). Government debt will explode to more than 53 percent of GDP, up from 19% now. . . 

Not all debt is bad of course. It often allows you (and countries) to invest wisely in areas that will be of benefit later, but I fear the lack of vision and planning associated with the government borrowing an additional $160 billion means ‘wisely’ isn’t part of this equation. Vision and hope are important for people. We need to know where we are going – what the end game looks like and that the pain is worth bearing because a better life awaits. Hope too, is important. People will endure a lot if they have hope. I’m afraid I saw neither in the Budget last week. There was lots of talk of jobs, and lots of picking winners but not much in the offing for those already struggling and those who will inevitably lose their jobs when businesses go under.

Figures are tricky things. If you say them quickly, especially the billions, they don’t sound so bad. Most people can imagine what they could spend a million dollars on. Billions are a different kettle of fish. Many of us have to stop and think, how many 0’s in a billion? When figures are inconceivable, people give up trying to work out what they mean. After all, the politicians will look after the money side of things, won’t they? I hope you realise that is very dangerous thinking. To start with it’s not the government’s money – it’s yours and mine, hard earned and handed over to the government for custodial purposes.  We hope it will be spent wisely on health, education, social welfare, but after we’ve voted every three years, we don’t have any say on where it goes.

Beware of those saying we can afford to borrow this much money. Just as when we borrow from the bank to buy a car or house, when government’s borrow, repayments must be made and this limits the amount in the pot for spending in extra areas. The state of our economy is your inheritance: to contribute to your tertiary education, to educate your future children, to provide medicines and hospital treatments when you are sick, to help those who for whatever reason have no income. A mountain of debt places the prosperity of your children in peril.

Picking winners is dangerous too. Government’s love picking winners, especially in an election year. Election year budgets often resemble a lolly scramble with media reporting the “winners and losers”.  The simple fact is when you confer advantage on one group everyone else is automatically disadvantaged. Giving to the vulnerable is understandable but private industry winners are not. As an example, those who had been promised Keytruda (last year) to treat their lung cancer only to have that rug whipped out from underneath them now must be devastated to see the racing industry handed $74 million to build/rebuild horse racing tracks around the country. Flogging a dead horse instead of funding up to date medical treatments is folly and unfair in a humane society. 

I know fairness and equity are important to you all. Your generation has a more egalitarian outlook on life. Partly I think this is because you have not experienced real poverty and why New Zealand’s debt doesn’t bother you as much as it does me.

I have recently read two excellent writings by people I respect and I want to share them with you. The first is a report written by Sir Roger Douglas and two colleagues called “The March towards Poverty”. . . 

The report concludes “ For too long, we have lived with the fiction that we are doing well, lulled by successive governments into believing we truly do have a ‘rock star’ economy. Nothing could be further from the truth. Starting with Grant Robertson’s post-Covid budget, we must admit to the problems facing our economy and begin to deal with them. Otherwise, current inequalities will remain entrenched, we will continue to fall further behind our OECD partners, and the prosperity of our younger generations will be placed at peril”.

While I’m on the topic of legacies, the second article I want to share is by Chris Finlayson, Attorney General in the Key/English Governments for 9 years starting when I was also a Minister. I’ve been worried about the legality of many of the impositions we have experienced since the country was plunged into lockdown. I know you sometimes think all this theoretical  stuff isn’t that important, but in a well functioning democracy how the law is made and enforced is central to an orderly society we can have faith in. Chris has eloquently described these matters much better than I can in his opinion piece  on the rule of law:

“Some readers will no doubt respond that this rule of law stuff is all very interesting for the legal profession and retired politicians but is hardly of any practical impact given what New Zealand has just avoided.

I disagree. The former Chief Justice, Sian Elias, once said that if only judges and lawyers concern themselves with the rule of law, New Zealand is in trouble. She was right. Adherence to the concept of the rule of law would have helped avoid some of the basic failures of the past eight weeks – failures that should give all New Zealanders pause for thought.”

I’m afraid it’s too late to put Ardern’s debt genie back in the bottle. I apologise on behalf of my generation and older that you and your kids will carry this debt for all of us. My advice to you is to do what this government should have done. Cut costs and minimise your liabilities. Spend only on the essentials and invest in assets that will produce a safe dividend. Perhaps most important of all, stay engaged in our democracy and encourage your friends to do the same. If COVID-19 has taught the world anything it is this: politicians need to be closely scrutinised at all times but especially in crises like these.

The government’s arrogance was exposed a couple of weeks ago when ministers were ordered not to speak in the wake of the Covid document dump. It’s carried on this week when Tourism Minister Kelvin Davis refused to attend the Epidemic response Committee because, doing a Facebook Live session instead.

The country needs an opposition focussed on the government’s mistakes and formulating a plan to do much, much better, not on itself and a leadership struggle.

Whatever happens at Friday’s caucus meeting, this is what National must be doing, and doing it together in step with the leader.

And whether or not there’s a change of leader, one thing must not change – and that’s the decision to rule out any deal with New Zealand First.


No plan, wrong people

May 15, 2020

If you were looking for a Budget with a coherent plan for recovery, you wouldn’t have found it in yesterday’s:

Today’s Budget doesn’t have the plan we need to get New Zealand working again, Opposition Leader Simon Bridges says.

Kiwis have sacrificed so much through the restrictions of the lockdown, our collective efforts have so far worked well, now we need to get our economy cranking again.

“With a thousand people a day joining the dole queue we needed a proper plan. Spending money is the easy part. But investing billions where it will make the most difference was what we needed.

“Today we are seeing an extra $140 billion of debt. That’s $80,000 per household and it’s our children and grandchildren who will be paying for it. That’s equivalent to a second mortgage on every house.

“We will have $100 billion in deficits for the next four years.

“The Government will spend more than $50 billion, more than any Government has ever spent in any one Budget.

“It needed to be spent in a responsible and disciplined way. What this Budget lacks is any detail and accountability of how it will be spent and what it will achieve. . . 

This Budget had to be a big spending one, but did it have to be this big?

Today’s Budget reveals the sheer scale of the economic challenge New Zealand is facing, National’s Finance spokesperson Paul Goldsmith says.

“We’ve just been through a dramatic health crisis, now New Zealanders can see the scale of the economic challenge and just how serious is.

“Unemployment is set to skyrocket to 9.8 per cent highlighting why the first priority must be to save jobs.

“With an extra $140 billion in debt, we’re facing debt levels not seen in decades, that’s nearly $80,000 per household.

“The Treasury predictions of future Government tax revenue and economic growth appear highly optimistic. New Zealanders should brace themselves for worse if this Government carries on.

“We welcome the limited extension of the wage subsidy however the $50 billion slush fund is totally unacceptable. The Government has cynically set aside more than $20 billion that it can spend before the election.

“There is very little in the way of a growth plan in this budget, beyond $230 million to encourage entrepreneurship and some announcements in infrastructure that we all know they will struggle to deliver.

While we agree that Government support is necessary to save jobs, we must be mindful that every dollar spent in today’s Budget will need to be paid back.

“What we need now is a genuine growth plan and careful economic management to pay down debt and get us back to growth without the need for higher taxes. . .

The lack of a plan is a point Paul Henry made:

“I think there is a good chance we [New Zealand] will miss the opportunity. I was hoping that there could be a bounce forward not a bounce back. It’s the human way – a life of least resistance. I’m not depressed, I’m disappointed.” . .

“I haven’t seen a long-term plan yet. I think the last six weeks I’ve seen us fighting a fire and trying to get back on our feet. We need a long-term plan. The world’s changed, and it’s changed for many years to come.” . . 

“There is not one person in the Government that has a plan or can articulate a plan.

“A plan has a start, a process and a goal….not one Minister can articulate what that plan is.

“Instead, it’s panic and continue to employ as many people as possible. That is not a plan’s arsehole. . .

David Farrar scored the Budget against 13 principles and found it wanting.

Grant White, owner of Logitech, is disappointed in the Budget too:

. . .Covid-19 package estimated to save 140,000 jobs over two years, and create more than 370,000 new jobs. I can’t see it and I await the detail of just how that will be done.

What I do know is what the government clearly doesn’t understand. There is only one thing the economy needs right now – confidence. And this budget is not going to generate it, indeed its failure to stop short and medium term redundancies is going to lead to an even greater reduction in confidence.

Bryce Edwards calls it a Budget with big numbers but little vision:

. . The problem for the government is that it has already been struggling to keep to its promise of being transformative. Previous budgets have shown Robertson and his colleagues have been unable to break free from their cautious instincts.

With the Coronavirus crisis, the opportunity was handed to the government to reset the economy and society, and deal with some long-term problems. Robertson even spoke about this during the leadup to the Budget, saying that now was the time to address intractable problems of economic dysfunction, inequality, and environmental decline. He talked of not wanting to “squander the opportunity”. And yet, many will look at today’s big-spending Budget and ask: “Is that it?

The problem isn’t just there’s no real plan to repair the economic damage inflicted by the COvid-19 response, the government has the wrong people to lead the recovery too.

Empathy and communication are valuable commodities in politics but they’re nothing without the ability to make a good plan and make it happen.

Does anyone who remembers the many and gradually less ambitious Kiwibuild promises really believe that Labour will build the 8,000 houses promised yesterday?

How much faith can we have in a Cabinet with Phil Twyford, Minister for the Kiwibuild fiasco and now Minister for the failed Auckland light rail project?

Or Labour deputy and Tourism Minister Kelvin Davis who after being notably absent while his sector faced the sector’s equivalent of foot and mouth disease, only popped up to do a possum in the headlights cameo with Paul Henry?

Does Minister of Health, David Clark, who was sidelined during the worst health crisis the country has ever faced give you confidence? Or what about his deputy Julie Anne Genter whose responsibilities include vaccinations? Remember the measles epidemic and the on-going flu vaccination debacle?

This government doesn’t have a plan and it does have the wrong people.


Where are all the Ministers?

April 8, 2020

Several questions have arisen in the wake of Health Minister David Clark’s admission he breached lockdown rules twice, one of which is why was he in Dunedin rather than in Wellington during this unprecedented crisis?

That leads to another question, raised by Chris Trotter:  where are the other Ministers?

Beyond the sterling example provided by the Prime Minister and her Finance Minister, New Zealanders could be forgiven for wondering if there is anyone else in the Coalition Cabinet equal to the challenges thrown up by the Covid-19 Pandemic. One has only to consider the curiously disengaged behaviour of Health Minister, David Clark. Yes, there was that ill-advised bike ride, but of even more concern is the fact that, in the midst of a national health emergency, New Zealand’s Health Minister has isolated himself in his Dunedin family home – 600 kilometres south of the capital. Moreover, as citizens’ rights are being necessarily curtailed, why do we hear so little from the Justice Minister and the Attorney-General? With more and more “idiots” flouting the Covid-19 rules, where is the Police Minister?

Shouldn’t Police Minister Stuart Nash be in Wellington, working with officials and available to answer questions given the draconian powers police have under the state of emergency?

Shouldn’t Justice Minister Andrew Little be concentrating on the crisis rather than trying to rush through the contentious Bill on prisoner voting?

Civil Defence officials are regularly fronting the media, where is their Minister Peeni Henare?

MBIE has a huge job working out what’s an essential business and what’s not. Where is their Minister Phil Twyford and why isn’t he at the media briefings?

Phone and internet enable good communication but conversations and deliberations at a distance are second best when compared with being on the spot.

The response to Covid-19 has been likened to a war. Shouldn’t there be a war cabinet, albeit at the two metre distance required for anyone outside their bubbles, working to not only deal with the health crisis but formulating the plan that will be needed to counter the economic and social challenges that are already apparent?

It doesn’t need a whole of government approach – and given the three parties in this one that wouldn’t be advisable. But it does need more than a cabinet of two.

Could it be that the crisis has shown the shallowness of talent in the government and that as Chris Trotter says, we could be forgiven for wondering if there is anyone else in the Coalition Cabinet equal to the challenges thrown up by the Covid-19 Pandemic? 

Is the reason the reason there isn’t a new Health Minister because there isn’t anyone else up to the job?

This begs another question: if they’re not equal to dealing with these challenges, are they equal to dealing with the challenges the recovery will pose?


Cash spray BAU

December 2, 2019

What does it say about a party when a keynote speech on infrastructure offers nothing more than funding for school maintenance?

Jacinda Ardern and Grant Robertson have cancelled billions of dollars of infrastructure projects whilst dressing up business as usual school maintenance grants as infrastructure investment, National’s Economic Development spokesperson Todd McClay says.

“Kiwis deserve the roads, transport and education infrastructure that National was delivering, not spin from a weak and wasteful government that’s failing to deliver on its promises.

“Today’s education announcement is less than it’s wasted on 300 plus government working groups and committees.   

“This Labour-led Government’s poor economic policies have slowed New Zealand down and on its watch, New Zealand’s infrastructure plans are in disarray.

“Labour inherited a strong economy with GDP growth around four per cent. Latest ANZ and ASB forecasts predict a drop to two per cent at a cost of $1.7 billion in lost revenue each year.

“At the same time this Government has wasted billions on failing policies and isn’t delivering on the things that matter to hardworking Kiwi families.

“Our economy is slowing because of Labour’s failure to deliver. A complete stall in infrastructure spend and $400 million of business as usual school repairs and maintenance just won’t cut it.”

Taxpayers’ Union spokesman Jordan Williams describes the announcement as  a lazy attempt to buy votes, rather than better educations:

“This announcement appears more targeted at parents’ votes, than fixing run down schools, and you only need look at which schools get what to figure that out.”

“What a lazy and pathetic policy. A brand new school gets the same dollop of cash as a school with buildings from the 1950s.  No school gets more than $400,000, but none less than $50,000. Ultimately that approach means those schools which desperately need redevelopment get less.”

“Instead of asking officials which schools need what, the Labour Party has cooked up an ‘every school gets cash’ policy for the PM’s big speech. This is the sort of stuff you’d expect from an unorganised opposition, not a Party in Government.”

It is because Labour was disorganised in opposition it delivers this sort of stuff in government.

“If this is indicative of Labour’s big spending plans, spraying taxpayer cash, instead of micro targeting so taxpayer money goes to where it is most needed, hundreds of millions of taxpayers’ dollars are going to go down the drain.”

If a government that inherited a very healthy economy has to borrow to fund maintenance it has its spending priorities wrong.

Borrowing for infrastructure investment when interest rates are so low isn’t wrong per se, but if the government is borrowing to spend on infrastructure it ought to be investing in new projects not on-going maintenance.

Maintenance is business as usual (BAU), it’s shouldn’t be the recipient of a cash spray, but then spraying cash is BAU for this government.


Too much of a good thing

October 9, 2019

The government has posted a $7.5 billion surplus:

The Government has unveiled a bumper $7.5 billion surplus and the lowest debt levels in almost a decade, the latest Crown accounts reveal.

That level of Government surplus has not been seen since at least 2008, just before New Zealand felt the full effect of the global financial crisis. . . 

It’s taking all that money yet failing to deliver on its promises.

Surpluses are good, but $7.5 billion looks like too much of a good thing.

The government is either taking too much, spending too little, or both.

National’s Economic Development spokesman Todd McLay says:

“The Government should be looking to stimulate the economy by letting New Zealanders keep more of what they earn.

“Instead, it has piled on more and more taxes to the point where Grant Robertson is sitting on a big surplus while those living outside Wellington’s beltway struggle with rising living costs.

“One of the reasons debt is lower than forecast is because the Government is failing to invest in the infrastructure New Zealand needs.

“It has cancelled or delayed a dozen major new roading projects right across the country and replaced them with projects that weren’t ready, and won’t be ready for some time yet.

This isn’t just taking more tax and doing less with it. Stalling new roading work risks a loss of skilled people who will head overseas if there’s a gap between current projects finishing and new ones starting.

“Meanwhile, the Government has been piling on taxes. It has legislated to milk an extra $1.7 billion from motorists through fuel tax hikes and extra GST, while its misguided housing policies have pushed up rents and burdened landlords with extra costs and regulation.

“National legislated for tax relief that would have put more than $1000 a year extra into the back pockets of New Zealanders. This Government cancelled that. 

“We will index tax thresholds to inflation so that New Zealanders aren’t taxed more by stealth every year because of the rising cost of living.”

Sound economic management requires much more than creating surpluses.

The government must take enough, but not too much, and it must scrutinise all its decisions to ensure its spending effectively and prudently.

The large surplus suggests the government could be investing more in infrastructure and filling some of the gaping holes in the health system.

It also shows it is taking far more than it needs and it could be leaving us all with a little more of our own money by way of tax cuts.


3/5s of not very much

September 23, 2019

Steven Joyce gives the government some much-needed advice:

It was confirmed this week that New Zealand is now running at little more than half speed.

From growing at rates of 3½ to 4 per cent three years ago our economy at the end of June was only 2.1 per cent larger than it was the previous June.

That’s a problem firstly because our population is growing at about 1.6 per cent a year, so if our economy grows at 2 per cent then the amount of additional wellbeing per person (to coin a phrase) is three fifths of not very much.

Not very much is far less than we need for economic, environmental and cultural wellbeing.

The second problem is that our terms of trade (the prices of our exports versus our imports) are still very strong so we should still be cranking along. It’s a problem if we are slowing down when the world really wants to buy what we are selling. What happens if the world actually falls out of bed?

What happens is recession and maybe even depression.

The government has been quick to blame the world economy for our lower growth rate this week, but our terms of trade put the lie to that.

The third problem is that there is no sign of anything on the horizon that will lead to much of an upturn, and in fact all the signs are that we are going to slow further. Our businesses are in a funk because of what is known as regulatory overhang. In short, they are too fearful to invest because the government is making lots of rule changes that could mean they don’t get much of a return for the risk they take.

It’s not just farmers, other businesses are too scared to invest.

The government for its part seems inclined to shrug its shoulders and say “nothing to see here”. They observe we are still growing (slightly) faster than Australia so what’s the problem? That story is likely to change in the next six months as Australia’s tax cuts come through and their housing market picks up. Anyway weren’t we trying to grow a lot faster than Australia so we could close the income gap with our cousins across the Tasman – what happened to that ambition?

This government has no ambition for growth, only for regulate, tax and spend.

The fourth problem is that lower growth means less to go around. If we were still growing as fast as we were then in real terms our economy would be around $5 billion bigger this year than it is. That means more money for higher pay and more jobs, and of course about 30 per cent of it goes into the government coffers – which would pay for a lot more cancer drugs, teachers or electric vehicle subsidies.

How hard is it to join the dots between higher growth and more for essential services and infrastructure?

So what to do? Well if I could offer some gratuitous advice to the Finance Minister I think he should be working on baking a bigger cake, and I think the recipe is pretty straightforward. Its time to rein in some of his ministerial colleagues who are wreaking havoc with business confidence.

For example he should suggest the Minister of Immigration sort out his portfolio so that horticulturists can find seasonal workers and the international education sector can get up off its knees. He should tell the Minister for the Environment to come up with a more reasonable plan for water quality improvements and methane emissions reductions so farmers step back from the cliff edge, and the Minister of Education to stop stuffing about with the apprenticeship system.

He should encourage the Reserve Bank Governor to be less heroic on bank capital requirements, persuade his colleagues to do a backtrack on gas exploration now it is proven the ban is simply value destroying and does nothing for climate change, overrule the Greens to permit some gold mining, and stop taxing tourists more so the tourism sector starts growing again. He should cancel the return to industry-wide pay bargaining given that NZ First are never going to vote for it anyway, tell the Transport Minister to get on with building at least some of the stalled roading projects, particularly given that light rail is years away, and reverse at least one of the petrol tax increases.

Then he could watch the economy recover and start thinking about how he’s going to allocate the increased government revenues. And New Zealand will be in much better shape if the world economy does get worse. . .

He won’t of course and nor will he see that it’s the poor and the struggling middle that will be hurt the hardest by policies which hamper growth.


A question of competence

September 12, 2019

The resignation of Labour Party president Nigel Haworth could have put the lid on the controversy over serious allegations against a staff member in the Prime Minister’s office.

But it won’t when so many questions remain over the handling of the complaints which started the saga and the ongoing claims that Prime Minister Jacinda Ardern didn’t know that the allegations were of sexual assault.

The Spinoff gives a timeline of the inquiry and Paula Bennett used yesterday’s general debate to  speak on it: (You can watch and listen to the speech here.)

The Prime Minister says she did not know there were sexual assault allegations against one of her staff members until Monday. I could go through the various media reports since 5 August and my own representation since being contacted by victims to show the inconsistencies in this, but they have already been well traversed in the last 24 hours.

If the allegations were serious enough to hire a QC, were they not serious enough for the PM to need, and want, to be fully informed?

Even if the allegations weren’t about sexual assault, surely they were serious enough for the PM to be fully informed about them?

Even if she wasn’t going to speak to the complainants, as she should have, surely allegations serious enough to warrant an investigation warranted someone senior talking to them and reporting back to her?

Back in 2016, Jacinda Ardern wrote an op-ed about the scandal surrounding the Chiefs rugby team. She said that a resignation is not enough: “It’s the PR quick fix—usher the source of the controversy away. But that solves nothing. After all, apologies followed by silence changes nothing, and change is what we need.”

The resignation today of Nigel Haworth cannot be, in the Prime Minister’s words, “the PR quick fix—usher the source of the controversy away.” Yes, Mr Haworth needed to go, and it should have happened weeks ago, but what is also known is that the Prime Minister’s own senior staff and a senior Minister have known the seriousness of the allegations but have not acted.

The complainants were members of the Labour Party. They genuinely believed that the party would listen to their complaints and deal with the alleged offender appropriately, but nothing happened. It clearly has taken an incredible sense of frustration, disappointment, and disillusion for these people to come to me, a National Party MP, to try and see their complaints addressed.

These are serious allegations. The Prime Minister cannot keep her head in the sand and pretend like it is happening somewhere far, far away. It is happening in her own office, in her own organisation. She is the leader of the Labour Party. The alleged perpetrator works in her leader’s office—he works for her.

Less than a year ago, the Prime Minister was in New York at the UN, trumpeting “Me too should be we too.” Well, who knew that that meant her own office was following the path well trod by all those companies who drew a curtain over sexual misconduct and inappropriate behaviour.

I have been told by the complainants that Jacinda Ardern’s former chief of staff Mike Munro knew about the allegations, her chief press secretary, Andrew Campbell, knew about the allegations, and the director of her leader’s office, Rob Salmond, knew about the allegations. I have been told by two victims who work in Parliament that they went to Rob Salmond around Christmas time and made a complaint about the alleged perpetrator.

That’s a lot of people who would normally report to the PM who purportedly didn’t on this very serious matter.

The Prime Minister has constantly said her office did not receive complaints and, in fact, encouraged the victims to speak to their line managers. They did. They have told me they went to Rob Salmond and nothing was done, and we are expected to believe that none of these men in her own office told the Prime Minister about the allegations—all of this in the aftermath of the Labour summer camp scandal, when the Prime Minister made it very clear she expected to have been told. And are we really expected to believe that she didn’t know that her chief press secretary, Andrew Campbell, embarked on a witch-hunt to try and find out who in the Beehive was talking to the media about the allegations? The complainants certainly felt hunted and scared that he was trying to shut them up and stop them from talking to the media—classic bullying of victims, and hardly a victim-led response.

A victim has told me that the alleged perpetrator has deep alliances to Grant Robertson, that he was involved in his campaign for the Labour Party leadership, and that Grant Robertson has known the seriousness of these allegations. It is unbelievable that he hasn’t discussed this with his close friend and his leader.

This all smacks of a cover-up. This goes straight to the top: to the Prime Minister, to senior Cabinet Ministers, and—

SPEAKER: Order! The member’s time has expired. . . 

Haworth’s time has expired, will anyone else follow?

This debacle does go to the top and at the top we have a woman whose brand is that of compassion, empathy and caring; one who we are expected to believe is a capable leader, who is, like Prime Ministers ought to be, is fully in control.

All of that is at very grave risk as a result of the mishandling of this situation and all the questions that remain over it.

One of those questions is that of competence: if the Prime Minister, her senior colleagues and staff can’t be trusted to run her office properly and safely, how can they be trusted to run the country?


Priorities

June 20, 2019

Last month’s Budget was supposed to be focussed on wellbeing, but some of its priorities suggest otherwise:

Hon Amy Adams: Why, when Budget 2019 allocated $15.2 billion of new operating spending over four years, couldn’t he find enough funding in the Budget to ensure that Pharmac’s funding at least kept pace with inflation?

Hon GRANT ROBERTSON: As has been traversed in the House last week, Pharmac did receive an increase in funding. In this Budget, in the health area, based on the evidence, mental health received a massive injection of funding after being neglected for many, many years. The overall health budget has received a significant increase. On this side of the House—as I said in answer to the last question—we can’t make up for nine years of neglect in one year or even two years, but we’re making a good start.

Hon Amy Adams: How can he say that he’s used “evidence and expert advice to tell us where we could make the greatest difference to the well-being of New Zealanders”, when the Government has chosen to pour hundreds of millions of dollars into fees-free tertiary at the expense of giving Pharmac enough money to keep pace with inflation?

Hon GRANT ROBERTSON: The premise of that member’s question is incorrect. Money that supports education, money that supports health, and money that supports housing are all part of the Budget; one is not at the expense of the other. What we’re doing is actually making up for the enormous under-investment of the previous Government.

Money spent in one area is not at the expense of money that can’t be spent in another?

It can only be spent once.

Even if you look at different categories, you can question priorities.

Extra resources for children who get to school without the necessary pre-learning skills and for those at school and failing are only two areas of much greater need, and that would make a far greater contribution to wellbeing, than fee-free tertiary education for all students, whether or not they need that assistance.

Hon Amy Adams: How does he think the refusal to even keep Pharmac funding in line with population growth has affected the well-being of New Zealanders like 14-year-old Stella Beswick, two-year-old Otis Porter, or Bella Guybay’s four-year-old daughter, who are all waiting desperately for the funding of lifesaving medicines that are funded in almost every other OECD country?

Hon GRANT ROBERTSON: As the member well knows, and as with the time she was in Government, Pharmac make those decisions. We now spend nearly a billion dollars on the Pharmac budget, and we will continue to invest in that. But we will also continue to invest in the areas which the last Government completely ignored—such as mental health—because that is what New Zealanders asked us to do.

Hon Amy Adams: How does he respond, then, to Troy Elliott, whose wife is suffering from serious breast cancer, and has said that New Zealand’s medicines funding is starting to make us look like a Third World country and that “this Government has to wake up; we’re going backwards.”?

Hon GRANT ROBERTSON: I understand that for any family that is going through a situation where they have a family member with cancer, that is traumatic. What we know in this country is that Pharmac makes the decisions about what drugs it invests in. . . 

Pharmac makes the decisions but the government allocates the funds which determine how much, or little, it can do.

Health inflation is many times greater than general inflation and this year’s Budget funding for Pharmac isn’t even keeping up with general inflation.

 

 

 


Budget inquiry must be widened

June 4, 2019

The National Party is calling for the Budget inquiry to be widened:

The Prime Minister must be open and transparent about what questions she has asked her Finance Minister since spurious allegations were made that National acquired Budget documents through criminal activity, Deputy Leader of the Opposition Paula Bennett says.

National has written to State Services Commissioner Peter Hughes requesting the SSC widen its Budget investigation into Treasury and its Secretary to address a number of serious questions about the behaviour of both the department and the Finance Minister.

“The GCSB’s National Cyber Security Centre has said publically that it told Treasury its computer system was not compromised, yet both Gabriel Makhlouf and Grant Robertson chose to issue statements implying National carried out a ‘systematic hack’,” Ms Bennett says.

“Among the many questions that still need answering is what information Treasury and the Finance Minister had at their disposal before they issued those statements.

“The SSC inquiry should also include a complete review of all communications between the Finance Minister’s office and the Prime Minister’s office under the ‘no surprises’ approach.

“It took 36 hours for Treasury to come clean that it was sitting on a lie, and the Prime Minister needs to explain why she allowed her Government to mislead the public for so long.

“Did she and Grant Robertson ask the right questions of Gabriel Makhlouf, or did they take a ‘see no evil, speak no evil’ approach to all of this?

“It is concerning that even after Treasury admitted the Budget information was obtained without any hacking, its statement failed to offer an apology or take responsibility, and continued to disparage the Opposition in an entirely inappropriate way. . . 

John Armstrong isn’t waiting for an investigation he’s calling for resignations:

The chief executive of the Treasury, Gabriel Makhlouf, must resign.

It might have been Budget Day, thereby making his departure hugely inopportune for the Labour-led Government. That’s just tough. Makhlouf has to go. And forthwith. His exit on the most important date in the Treasury’s calendar may have piled humiliation on embarrassment.

It left Grant Robertson’s shiny new wellbeing budget feeling somewhat sick on its first public appearance. That’s just too bad. Makhlouf has to go. He has no choice in the matter. . .

He has to go — and for two simple reasons. Budget secrecy is sacrosanct; Budget secrecy is paramount. That is the bottom-line. It is non-negotiable. Any breach is sufficient grounds alone for heads to roll.

In Makhlouf’s case, there is another factor which should have sealed his fate — competence.

The ease with which National extracted Budget-connected information from the very heart of the (usually) most infallible branch of the Wellington bureaucracy demonstrated the shocking inadequacy of the Treasury’s cyber security.

It seems it is no exaggeration to say that the protections currently in place to guard that information have been at best lax and at worst non-existent. . . .

On top of that, the department’s handling of the aftermath of the breach of security raised further questions of competence.

The rapidity with which Makhlouf referred matters to the police following the hacking which soon enough turned out not to be hacking conveyed the impression that he believed National was responsible.

Although he endeavoured to avoid making that insinuation, in process, he veered dangerously close to soiling the Treasury’s neutrality.
While he might well be as neutral as he ever was, he is no longer seen as neutral. That is unacceptable. . . .

But this isn’t the only resignation Armstrong thinks should happen:

Should Robertson also be tending his resignation as a Cabinet minister or be sacked by the Prime Minister? The answer is an emphatic “yes”.

A breach of Budget secrecy — especially one of this week’s magnitude — is something so serious that resignation is mandatory.The applicability of ministerial responsibility demands nothing less. But it ain’t going to happen.

Robertson is exempt from having to fall on his sword. That exemption is by Labour Party decree. He is just too darned valuable.

Both he and the Prime Minister have made it very clear that they will move mountains to ensure Robertson emerges from this episode as untarnished as possible by placing responsibility for the breach fairly and squarely in the Treasury’s lap. . .

It’s been fascinating following commentary from the left which is trying to paint Simon Bridges as the wrong-doer in the botched Budget saga.

While we are mentioning Bridges, let’s deal with the bogus claims of his critics that his accessing of Budget documents was unethical, even if it was not unlawful. That is nonsense. Since the dawn of time, it has been incumbent on Opposition parties that they expose faults and failings in the policies and procedures adopted by the government of the day.

In revealing that the Treasury’s notion of what passes for Budget secrecy is screamingly flawed, Bridges has acted in the public interest.

Can his critics in Labour’s ranks put their hands on their hearts and affirm they would do things differently if they faced the same circumstances in Opposition? Of course not.

Bridges has simply been doing his job. On this week’s form, it is conceivable that he is going to be doing it a lot longer than both friend and foe have been predicting.

The machinations may be of little interest to any but political tragics but the botched Budget provided the Leader of the Opposition with an opportunity to shine in a week when the spotlight ought to have been on the Finance Minister and his leader, and shine he did.


Just when you think it can’t get worse

May 30, 2019

Treasury allowing Budget information to be found from a simple search on its own website was bad enough.

Calling it hacking and involving the police without properly investigating first was worse.

And just when the organisation ought to be showing it’s learned a lesson and taking extra care it does the opposite:

. . . 10:30am – In a major blunder, Treasury staff mistakenly handed out copies of the budget to journalists and political commentators.

Newshub’s Political Editor Tova O’Brien tweeted that she was given one of the top secret documents. When the recipients questioned whether they were supposed to see them before going into the lock-up, she says an official asked “Are you not Treasury?” before hurriedly taking the copies back. . . 

It’s a simple human error but given the lead-up it shouldn’t have happened.

So will heads roll?

Treasury bungled badly and Finance Minister Grant Robertson and Winston Peters made baseless accusations against Simon Bridges.

Will there be resignations or even apologies?

Don’t hold your breath.


There are three kinds of people in the world . . .

May 24, 2019

There are three kinds of people in the world, those who can count and those who can’t . . .

It’s more than a little concerning that this exchange in parliament on Wednesday shows the Minister of Finance appears to be in the second group.

. . .Hon Paul Goldsmith: To the nearest billion dollars, what is an additional 1 percent GDP growth worth to New Zealand?

Hon GRANT ROBERTSON: I believe it’s about $800 million.

Hon Paul Goldsmith: $800 million?

Hon GRANT ROBERTSON: About that.

Hon Paul Goldsmith: Does he think that the people of New Zealand would expect their Minister of Finance to know that 1 percent of GDP is about $3 billion and that’s the amount of money that we’ve missed out on given the sharp decline in growth in the past year? . . .

Even those who struggle with numbers would recognise that there is a significant difference between $800 million and $3 billion.

We should also be concerned that the Minister has conceded defeat on Budget responsibility rules:

Finance Minister Grant Robertson has today thrown in the towel by scrapping his self-imposed debt target, National’s Finance Spokesperson Amy Adams says.

“Grant Robertson has been backed into a corner by allowing the economy to slow, over promising and making poor spending choices. Now, instead of a fixed target Grant Robertson has lifted the debt limit by 5 per cent. That loosens the purse strings by tens of billions of dollars.

“This is a blunt admission the Government can’t manage the books properly, it is not wriggle-room. This makes the fiscal hole look like a puddle.

“You can almost guarantee that means debt at the upper end of the range of 25 per cent. This is an admission of defeat from a Finance Minister who has repeatedly used these rules to give himself the appearance of being fiscally responsible.

“This decision will mean billions of dollars more debt because the Government can’t manage the books properly and wants to spend up on big wasteful promises in election year.

“This will pay for things like Shane Jones’ slush fund, fees-free tertiary and KiwiBuild – in other words, it’s wasteful spending.

“Debt isn’t free. It will have to be paid for by higher taxes in the future. . . 

The economy is slowing and its poor policies are, at least in part, responsible for that.

Reducing wasteful spending should come before more borrowing.

If the government had concentrated on value for money, measured success by the quality of its spending rather than the quantity and enacted policies which promoted growth it wouldn’t have to even contemplate more debt.


Rural round-up

March 1, 2019

Govt warned over loaning WMP $10m :

The Government was warned that loaning Westland Milk Products $10 million may set a precedent to other companies that they could turn to the Government when they could not get a loan from the bank.

In a briefing to Finance Minister Grant Robertson in September last year, released on the Treasury’s website this afternoon, Treasury officials said the decision to loan Westland the money should be deferred.

Despite this, two months later Regional Economic Development Minister Shane Jones announced that $9.9 million would be allocated to the South Island dairy co-op. . .

Fund farmers for the public benefits that come from their land – Mike Foley:

 Imagine if Australia’s private landholders, who manage half the country’s landmass, were investing significant funds into climate change reduction and environmental improvements.

That’s the scenario a cross-industry coalition of agricultural, forestry and environment groups are working towards, using the lead-up to the federal election to argue for policy change which could reimburse farmers for the public benefits delivered by their land management outcomes. . .

Fonterra’s milk-price news is soured by chairman’s critique of the company’s earning performance  – Point of Order:

At last a ray of sunlight into the country’s cowsheds: giant dairy co-op Fonterra has lifted its forecast farmgate milk price to $6.30-$6.60kg/MS, up from $6-$6.30, on the back of strong global demand.

The good news extends to next season, with ANZ economists predicting – because dairy commodity prices are improving more quickly than expected – the forecast for 2019-20 could go as high as $7.30kg/MS.

And there is something else Fonterra suppliers might get a bit of a glow from: the recognition by Fonterra’s top brass that the co-op has not been performing anywhere near where it should be. They’ll be looking for a sharp improvement, even if the co-op has a long way to go to match the achievements of smaller outfits like A2 Milk and Synlait. . . 

Fonterra Fund units hit record low – Rebecca Howard:

(BusinessDesk) – Units in the Fonterra Shareholders’ Fund hit a record low after the dairy cooperative cut its forecast earnings and said it won’t pay an interim dividend.

Fonterra downgraded its earnings forecast to 15-25 cents per share from a previous forecast of 25-35 cents per share, blaming the increased milk price which saw it hike the farmgate price to its supplier-shareholders.

The downgrade implies annual earnings of between $242-403 million in the year ending July, compared to the earlier projection of $403-564 million. . .

Fonterra to explore opportunities in complementary nutrition:

Fonterra has taken a stake in Motif Ingredients, a US-based food ingredients company that develops and commercialises bio-engineered animal and food ingredients. 

Fonterra joins Ginkgo Bioworks, Breakthrough Energy Ventures, Louis Dreyfus Companies and Viking Global Investors.

Judith Swales, head of Fonterra’s Global Consumer and Foodservice business, says the move is part of the Co-operative’s commitment to its farmer-owners to stay at the forefront of innovation to understand and meet the changing preferences of consumers. While the terms will not be disclosed, Fonterra’s investment represents a minority stake in the business. . . 

Ngāti Hine Forestry Trust Launches “Ngā Māhuri o Ngāti Hine”:

Twenty young men from Kaikohe and Moerewa are set to start their journey in the Forestry Industry as trainees on the new Ngā Māhuri o Ngāti Hine Mānuka Plantation Training Program.

This is the first part of a 2yr program funded by the Billion Tree fund through Te Uru Rākau and supported by the Ministry for Primary Industries Economic Development Unit. Ngāti Hine Forestry Trust is partnering with Johnson Contractors LTD to deliver a “learn while you earn” approach to L2 Forestry Training.

Ngāti Hine Forestry Trust Chair, Pita Tipene says “Ngā Māhuri o Ngāti Hine means the saplings of Ngāti Hine; this is an industry training program which embodies the kaupapa of Ngāti Hine Forestry Trust Mission – He Ringa Ahuwhenua, He Hanga Mahi, to actively grow our assets. These akonga (learners) are our hapū and community assets”. . . 


Hunter Downs irrigation scheme down

October 10, 2018
The Hunter Downs irrigation scheme hasn’t got enough support to go ahead.

Hunter Downs Water Ltd announced yesterday it did not have enough buy-in from landowners in its command area between the Waitaki River and Timaru.

The company owns resource consent to use up to 20.5 cumecs of Waitaki River water.

The irrigation proposition was launched in 2006.

In March last year, shares were offered in a $195million scheme to irrigate 21,000 ha and a government development funding grant of $1.37million had been made. By June 2017, the design was shrunk to 12,000 ha.

At the end of last year, South Canterbury rich-lister Gary Rooney’s offer to buy “dry shares” saved the project from being scrapped then.

In April, Finance Minister Grant Robertson announced Crown Irrigation Investments Ltd’s $70million term debt funding would no longer be available to the scheme. So the company released a new funding proposal in August, asking all prospective investors to reconfirm their commitment.

Not enough did.

Chairman Andrew Fraser said yesterday “a significant drop-off in support” meant the scheme could not proceed.

It was not all about intensifying land use and converting to dairying, but rather relieving pressure on existing water takes, decreasing reliance on surface water extractions, and using the plentiful Waitaki River resource, he said. . .

These schemes have to have the support of farmers. But without debt funding from Crown Irrigation, the cost would have been too high for too many. IrrigationNZ rightly calls it a lost opportunity for South Canterbury.

The scheme had the potential to significantly boost the Waimate economy, create jobs, improve people’s standard of living and help resolve water quality problems,” says Andrew Curtis, Chief Executive of IrrigationNZ.

“It’s disappointing that a scheme with wide reaching community benefits won’t proceed.”

“Much of Environment Canterbury’s plans for improving water quality in the South Canterbury coastal area rely on the development of the irrigation scheme to reduce pressure on groundwater and augment the Lake Wainono Lagoon. Hunter Downs still wants to use its consent to augment the Lake Wainono Lagoon, but the other environmental impacts of the scheme not proceeding will need to be worked through.”

The scheme wouldn’t just have drought-proofed farms, it would have    had environmental benefits in improved water quality and lagoon enhancement.

“While farmers benefit from irrigation development, so do local communities. Irrigation projects are difficult to get off the ground if farmers are the sole funders of major infrastructure projects. There have now been numerous studies completed of New Zealand irrigation schemes and all demonstrate that irrigation have significant benefits for local communities and create substantial new tax income for the government,” says Mr Curtis.

“Other countries are increasing their investment in water storage to recognise that their communities and economies need access to a secure water supply in a changing climate. New Zealand needs to keep making similar investments to future-proof our water resources and food production, and secure our export income.”

On the south of the Waitaki River the economic, environmental and social benefits of irrigation are obvious. Those on the other side of the river will miss out on all of that without the scheme.

PM there and here

September 27, 2018

Happy headlines are following Jacinda Ardern in New York.

Back home the media are looking past the stardust to the continuing saga over Derek Handley and the position of Chief Technology Officer he was appointed to then disappointed from.

NZ Herald opines:

There can be no doubt the Derek Handley saga is a train wreck that is now threatening to derail confidence in the Government.

Prime Minister Jacinda Ardern may have been hoping she could leave the domestic turmoil of the past few weeks behind her, while she – with partner Clarke Gayford and baby Neve – wows world leaders and their delegations at the United Nations in New York.

But she clearly wasn’t banking on tech entrepreneur Derek Handley yesterday releasing his text and email communications with her and former Minister for Government Digital Services Clare Curran, and speaking further about the whole sorry saga – including bemoaning his lack of apology or explanation in the matter of the bungled chief technology officer recruitment process.

Possibly Ardern thought sacking Curran from that ministerial post – and Curran’s subsequent resignation from all her ministerial portfolios – was enough to put the incident to rest.

However, yesterday the PM found herself having to fend off accusations she had misled Parliament over her own communications with Handley, Finance Minister Grant Robertson was forced to correct his answer in Parliament over emails between Handley and Curran, and new Digital Services Minister Megan Woods was clearly forced to finally call Handley to apologise for the “impact this has had on him and his family”. She also had to retract her statement there had been a confidentiality agreement with Handley over his financial settlement.

What a shemozzle.

It still doesn’t feel like a satisfying conclusion for anyone – if indeed this end of the matter. . .

This is a serious black mark for the Government. The overall unease around communication, competency and transparency over this issue is now raising questions about the PM’s leadership and the Government’s integrity in general. . .

Audrey Young writes:

It is becoming a habit – for the second time in three weeks, National leader Simon Bridges has accused Prime Minister Jacinda Ardern of misleading the public.

This time she has also been accused of misleading Parliament as well as the public and Bridges has demanded she correct her statements.

Ardern put up a strenuous defence on both counts that there was no need for corrections. . .

But Kiwiblog quotes Hansard: and shows on the 18th and 19th of September in answer to questions from National leader SImon Bridges that taking the most generous view of what she said, she was at the very least economical with the truth.

Back to Young:

Until now, the fiasco, mainly over an undisclosed meeting, had reflected badly on Curran but the contagion has spread to Ardern and made the Government look amateurish.

Grant Robertson had to correct an answer in the House today he gave last week on Clare Curran’s emails to Handley and Woods had to retract a suggestion that the severance contract with Handley may have been subject to a confidentiality clause.

Acting Prime Minister Winston Peters swore blind Ardern was blameless of anything and everything.

True, she will not have to correct any answers she has given to Parliament.

But that is almost irrelevant because even if she did, it would not undo the damage she has done to herself.

A train wreck, a schemozzle,  a fiasco. These aren’t adjectives any government wants applied to them.

But nearly a year into office, the one that explains the mess is amateurish.

 


Rural-round-up

June 26, 2018

New Zealand primary sector nervous over prospect of trade wars – Jamie Gray:

New Zealand’s primary sector is viewing the rising tide of global trade protectionism with trepidation, but escalating trade tensions between the United States and China have yet to spill over into this country’s main exports.

Primary sector and trade representatives welcomed last week’s launch of trade talks with the EU as positive step.

At the time, European Union trade commissioner Cecilia Malmström voiced concerns about trade issues that have plagued markets in recent weeks after the US Donald Trump administration imposed steel and aluminium tariffs and the US and China stepped up their war of words. . . 

Guy Trafford traces the implications for agricultural trade flows from the game of poker the US is playing with China. All sides are vulnerable, even those not directly involved – Guy Trafford:

President Trump and China’s President Xi Jinping are involved in a high stakes game of poker. Trump played the first hand with a $5 0billion tariff card. Xi Jinping immediately matched it with a similar call and put tariffs on US products, namely sorghum and soya beans.

Trump then matched and raised the stakes by increasing the tariffs to another $200 billion with the threat that if China matched this then another raise to $450 billion would be played.

This threat would put tariffs on over 90% of China’s exports to the US. . . 

Clampdown on foreign farm buyers scares off investors with ‘tens of millions’ in funds, agents say – Jonathan Underhill:

(BusinessDesk) – The government’s directive to the Overseas Investment Office to raise the bar in overseas applications to buy sensitive New Zealand land has scared away tens of millions of dollars in investments in rural property and will hurt farm values, real estate firms say.

The ministerial directive in a letter from Finance Minister Grant Robertson last November to Land Information NZ chief Andrew Crisp said the government is concerned to ensure any benefits from overseas investment in rural land “are genuinely substantial and identifiable” and economic benefits must be considered alongside environmental, social and cultural goals. Owning sensitive New Zealand assets was “a privilege, not a right.” The directive came into effect on Dec. 15 last year. . . 

Foreign farm buyer applications withdrawn in the past 12 months have tripled, OIO figures show – Jonathan Underhill:

(BusinessDesk) – The rate at which potential foreign buyers of New Zealand farms subsequently withdrew their applications to the Overseas Investment Office tripled in the past 12 months, OIO figures show.

The data captures the period since the government’s directive to the OIO to tighten rules for overseas applications to buy sensitive New Zealand land (which means any farmland over 5 hectares). The ministerial directive in a letter from Finance Minister Grant Robertson last November to Land Information NZ chief Andrew Crisp said the government aims to ensure any benefits from overseas investment in rural land “are genuinely substantial and identifiable” and economic benefits must be considered alongside environmental, social and cultural goals. Owning sensitive New Zealand assets was “a privilege, not a right.” The directive came into effect on Dec. 15 last year. . . 

Bayer Hawke’s Bay Young Viticulturist of the Year 2018 announced:

Congratulations to Jonathan Hunt from Delegats, Crownthorpe Vineyard, who became the Bayer Hawke’s Bay Young Viticulturist of the Year 2018 on Thursday 21st June.

This is the third year Hunt has competed and he is thrilled to have won the title and to be going on to represent Hawke’s Bay in the National Final.

Congratulations also goes to Nick Putt from Villa Maria who came second and Grace Petrie from Trinity Hill who came third. . . 

Creative tea and coffee trends good news for NZ dairy:

It’s tea, but not as you know it. Right now people are adding more than just milk and sugar to their cuppa’s and Fonterra is set to meet the demand for adventurous tea and coffee drinks around the world.

Beverages made with yoghurt, topped with cream cheese and mixed with cream are growing in popularity, leading Fonterra to establish a new channel within its Global Foodservice business, Beverage House.

Almost 600 million cups of tea and coffee are consumed out-of-home daily in the Asia Pacific region, a 22% increase on five years ago. . . 

Report Provides Zero Carbon Solution:

Smoke free, plastic free but, more significantly, tillage free.

A report to the Productivity Commission is recommending “bold action” to eliminate tillage or ploughing within the next five to 10 years and replace it with low disturbance no-tillage.

Every time soil is tilled through conventional methods, it releases huge quantities of CO2 into the atmosphere which contribute to global warming.

While the government has introduced a Zero Carbon Bill, it has overlooked the impact of cultivation which causes up to 20 percent of global greenhouse gas emissions and the report challenges the Minister, James Shaw, through the Productivity Commission, to do something about it. . . 

In dairy, a cutthroat U.S. business versus a Canadian cartel – Jerry Zremski:

A little comparison shopping goes a long way toward explaining why President Trump decided to wage a trade war with Canada.

A gallon of milk cost $2.89 at the Tops Friendly Supermarket on Niagara Street last week, while the same product at the Avonmart on Garrison Road in Fort Erie cost $3.35 in American dollars. And Fort Erie shoppers are getting a bargain: According to Numbeo, a crowd-sourced comparison price guide, the average cost for a gallon of milk throughout Canada is $6.32 in American dollars, nearly twice the U.S. price.

And it’s all because the United States and Canada operate their dairy industries in ways that are as different as a bald eagle and a maple leaf. . . 

World Desertification Day: Stories of Resilience from Somalia :

In observation of World Day to Combat Desertification and Drought, delve into four stories of resilience from desert lands in Somalia. Meet two farmers and two female entrepreneurs, who—supported by the Somalia Emergency Drought Response and Recovery Project (SEDRP)—share their experiences of grit, hope, and resilience despite years of drought and famine risks.  Together with partners, particularly the UN’s Food and Agriculture Organization (FAO) and the International Committee of the Red Cross (ICRC), the project aimed to scale-up drought response and recovery in Somalia.

1. An impressive harvest, a happy farmer

The story of Saed Mohamud may not typically be expected from Somalia in 2017, two years into a severe drought that put the country in a nationwide state of natural disaster and famine—yet Mohamud is not alone. In 2017, thousands of families beat the odds and produced good yields, thanks to concerted efforts from government and partners, and solid donor investment in building farmers’ resilience against drought. . .


The h word

June 11, 2018

This isn’t a good look:

Finance Minister Grant Robertson gave a post-Budget speech at a $600-a-head Labour fundraiser at the exclusive Wellington Club, drawing comparisons to the previous National Government’s “Cabinet club” scandal.

According to several attendees, about 40 people, including party supporters, business figures and corporate lobbyists, attended the dinner hosted by Labour president Nigel Haworth on Wednesday, at which Robertson was the key attraction.

A similar dinner is due to be hosted at the even more exclusive Northern Club in Auckland on Thursday night.

National leader Simon Bridges has accused the Government of hypocrisy, after Labour once described National’s events, which appear similar to the one attended by Robertson, as “cash-for-access”.

The concern is that wealthy figures are able to gain access and insight that is not available to the general public.

I don’t think  access and insight are problems, as long as the general public also has reasonable opportunities to meet, hear from and question Ministers at no cost.

If we don’t want public funding of political parties – and I definitely don’t – then parties have to raise funds and these sorts of functions are good ways to do it.

It might be dancing on the head of a pin but the invitation should be clear that the speakers aren’t there as Ministers.

I’ve hosted National fundraisers where guests meet, hear from and talk to party spokespeople. The two-way communication gives value for MPs and those there to meet them.

So it’s not that Robertson was the key attraction that’s the problem, it’s that the invitation said he was there as Finance Minister and that Labour and Robertson in particular criticised National for running similar events.

Now less than a year into government, Labour are displaying gross hypocrisy by doing it themselves and not distinguishing between the role of minister and MP or party spokesperson.

The h-word is never a good look, especially when it’s on display at some of the country’s most exclusive venues.


New fund for biosecurity?

May 21, 2018

Finance Minister Grant Robertson is considering a fund like EQC to cover biosecurity breaches.

He told Mr Dann he has asked Treasury and the Ministry of Primary Industries to investigate the possibility of creating a fund that could be funded partly by the government and partly by industry.

“We can’t just sit there and wait for these things to happen. We know they’re happening more regularly and I want us to get ahead of that,” he said.

“We are in a very reactive stance when they come in. We have this with Mycoplasma bovis, and we scramble around both as a government and the industry, trying to find the money to respond to them.”

“What I’d like to see is for us to get ahead of those. . .

A Border Clearance Levy was introduced in 2016:

The introduction of the levy allows the Ministry for Primary Industries (MPI) and the New Zealand Customs Service to manage resourcing of border clearance activities as passenger numbers go up or down.  This will mean the right resources are in place to keep New Zealand safe from harmful pests, people and dangerous substances and maintain current levels of service.

That’s supposed to stop biosecurity risks at the border, it doesn’t cover dealing with, and compensating for, anything which gets past the border.

The EQC levy and a Fire Service levy,  are imposed on all insurance policies. That does let people without insurance away without paying but the rest of us pay.

While the Canterbury earthquakes have raised issues with EQC, most of us pay the levies without complaint in the knowledge that any of us could be victims of natural disasters or fires.

Farmers, horticulturalists and orchardists, and native species are those most at risk from a direct biosecurity incursions which are very different from earthquakes and fires.

There’s no way to levy our flora and fauna. It would be easier to levy farmers and growers of fruit and vegetables.

The problems and costs of dealing with and compensating for M. bovis show the need for change.

Keith Woodford identifies some of the problems in the way it’s been and is being handled:

As I write this on 20 May 2018, New Zealand is at a crucial point in deciding how to manage Mycoplasma bovis. There are no good options. The worst option is for the Government to try and be the boss.

So, who should try to manage Mycoplasma bovis?

At the national level, the answer is ‘no-one’.  Farmers must make their own business decisions and take responsibility for those decisions.

Elsewhere in the world, governments do not try to manage Mycoplasma bovis. It is up to farmers to do this.

The role of our Government should be to continue monitoring at the national level using sampling techniques. But trying to identify all infected animals so as to eradicate the disease, and even trying to limit stock movements, this will be counter-productive.  Government has neither the resources nor the expertise. And the mess will just get bigger and bigger. . . 

Gypsy Day is in a couple fo weeks, thousands of cows need to be moved for winter feed or to new farms.

Some commentators have been suggesting that we should manage the disease in the short term but still work towards long term eradication. However, the epidemiology of this particular disease is such that this is unlikely to happen. No other country of the world – and Mycoplasma bovis is present in all the main dairy producing countries – is attempting to do this.  Unless some new technologies come forward, this disease is always going to be with us.

In the long term, it may be possible to produce a vaccine for Mycoplasma bovis. However, I do not know of anyone currently working on this.

The hard reality is that all farmers now need to manage their own situation, supported by advice by their veterinarians and other rural professionals with whom they work.  We know the risk factors. It is simply a case of making sure that these risks continue to be communicated, and then decisions must be made for each farm in the context of its specific situation. . .

The M. Bovis outbreak has been mishandled from the start when MPI worked on forward tracing – of cattle going from the farms where it was first identified, rather than backward tracing to find out where it had originated.

MPI now accepts that Mycoplasma bacteria were present in New Zealand at the start of 2016. But among my informal networks, there is no-one who is confident that this is time zero. The debates that we have, based on various pieces of evidence, include whether time zero was around 2014, or whether time zero was even earlier than that.

With hindsight, it seems that the battle between Mycoplasma bovis and MPI was always going to be a victory for Mycoplasma bovis. For it to be otherwise, MPI Biosecurity would have either had to stop its first entry to New Zealand, or else have identified the first incursions before they had spread.

Clearly there have been major deficiencies in NAIT (the national animal tracing system) but this is not the reason that Mycoplasma is currently out of control. Much more fundamental to the issue is that Mycoplasma had a head start, probably of several years.

There will also need to be hard questions asked about MPI itself – not the individuals but the system. Within my networks, which include people working directly on the Mycoplasma project, there is frustration that field-level understandings get lost as messages flow up the chain.

I would like to see MPI staffed at the highest levels by specialists rather than by managers drawn from totally different fields of expertise. From the website, I can see a ten-member senior leadership team with military experience, social development experience, communications experience and even a love of ballet. But apart from one forester and one agricultural economist, I cannot see any signs of people with experience of how things actually happen out in the field, nor an understanding of relevant sciences which determines how different diseases must be attacked differently. If the expertise is there, it is not evident.

I have significant doubts as to whether lack of funding is a key cause of the current situation. More likely, it is about organisational culture. It also needs to be recognised that generic management taught in MBA type programs may not be the ideal training for a Biosecurity Unit.

Anyone who has been affected by the disease and the way it’s been handled would second this.

Questions now have to be asked as to whether or not we have appropriate systems in place in case of a foot and mouth disease outbreak. I cannot answer that.

Foot and mouth disease would play out very differently than Mycoplasma bovis. If Mycoplasma bovis is a stealth bomber, then foot and mouth disease would be a nuclear event.

With foot and mouth disease, there would need to be immediate 100 percent accurate tracing of animal movements of the preceding days and possibly weeks, but not long term historical movements. There would need to be immediate and total lockdown on all animal movements across the country. Emergency vaccinations may need to be part of the toolbox.  All scenarios would need to have been thought through in advance.

With Mycoplasma bovis, it is evident those scenario analyses were not in place, so perhaps they are also not in place for foot and mouth disease.

Coming back to the immediate issues of Mycoplasma bovis, the key constraint going forward may well be for Government itself to recognise that it does not have the capacity to either eradicate or manage Mycoplasma bovis. The idea that ‘we are the Government and we are here to help you’ may well be an oxymoron.   Can Government understand this?

There might be a case for a fund partly paid for by farmers and growers.

But not as a knee jerk reaction to problems caused by the mishandling of M. bovis.

Unless those are addressed the fund would look more like another way to sneak in a new tax.


Govt acts on threat to irrigation

April 6, 2018

The government has acted on its pre-election threat to axe funding through Crown Irrigation Investments.

Three schemes already under way will keep the funding promised.

The government will help fund the construction of irrigation projects on the Canterbury plains and near Kurow and Nelson as it winds back support for large-scale water schemes.

Finance Minister Grant Robertson today said all existing Crown Irrigation Investments Ltd development contracts will be honoured, and that the three named schemes will receive funding for their construction phase given how far down the track they were.  . . 

IrrigationNZ bemoans the lost opportunity.

 . . .“In Crown Irrigation Investments Briefing to Incoming Ministers, the socio-economic gain to communities from planned future irrigation projects in New Zealand was over $1.2 billion per year. With a number of these projects being unable to access loan funding, this is a huge lost opportunity for these rural communities,” says IrrigationNZ Chief Executive Andrew Curtis.

“The Hurunui Water Project, Hunter Downs and Flaxborne irrigation projects all have local community support and also meet strict new environmental requirements around river swimmability and nutrient limits. In addition to this they plan to undertake additional activities to help improve existing water quality – for example the Hunter Downs scheme was planning to augment river flows into the Wainono Lagoon which will help to restore this culturally and environmentally significant ecosystem. A recent UNESCO report – Nature Based Solutions for Water, has highlighted the importance of ‘green infrastructure’ initiatives such as this for improving water quality globally,” he adds.

The Hurunui, Hunter Downs and Flaxborne projects aim to provide water security to predominantly beef, sheep and cropping farms in drought prone areas.

Over the past summer we have experienced droughts followed by unprecedented wet conditions. This is indicative of the climate change impacts we can expect to see in the future,” says Mr Curtis. “It is critical for rural east coast farming communities to have access to a reliable water supply in order to help them manage through these effects,” says Mr Curtis.

Mr Curtis says that when farming communities experience significant droughts, it’s not just farmers who suffer but also the rest of the community and local businesses.

“Local councils see the value of investment in water infrastructure and recognise this as one of the most pressing issues for their communities. We would like to see the merits of these projects considered through the Provincial Growth Fund. These projects will build more resilient rural communities and provide significant community benefits.”

Irrigation would be much better use of regional development funding than a Minister’s pet projects.

Axing the fund continues the government’s raid on the regions.

The Government’s confirmation it will axe major irrigation projects is the second major blow it’s dealt to regional New Zealand in a week, National’s Paul Goldsmith and Nathan Guy say.

“Fresh from whacking a major new fuel tax on New Zealand motorists the Government has announced it will leave regional farmers and growers at the mercy of prolonged droughts by canning support for important irrigation projects,” National’s Agriculture spokesperson Nathan Guy says.

“This is a huge blow to regional New Zealand which is facing an increasingly uncertain future as a result of this Government’s raid on our regions.

“This summer alone saw six regions declared in drought as dry weather hammered primary producers right around New Zealand. These irrigation projects would have given them the certainty they could deal with future dry spells but that certainty’s now been ripped away.

North Otago used to be wracked by recurring droughts which caused widespread financial, environmental and social distress.

Now large areas are irrigated the district is virtually drought-proof.

Irrigation has enabled the production of more food, the provision of more jobs and provides insurance against dry weather.

Mr Goldsmith says the Government’s regional growth strategy is a mess.

“It’s Jekyll and Hyde and seems to come down to which of Labour’s two support parties wins the day.

“One day Shane Jones sticks his finger in the air and doles out taxpayer cash for pet projects, the next day four ministers announce the Government will rip $5b out of regional road funding but tax motorists more and the next it is stripping millions out of important and demonstrably effective regional irrigation projects. . .

It just shows the Government has no clear strategy.

“It says it supports regional New Zealand but it continues to put the boot in. Axing irrigation projects makes it harder for farmers and growers to do their jobs, harder for them to create jobs, harder to grow our exports and harder for New Zealanders to get ahead.”

It’s ironic that the government wants us to take climate change seriously, including the risk of more droughts, yet has striped funding from irrigation projects which could provide insurance against dry weather.


Bending branches

February 7, 2018

Government ministers are bending the branches of government to breaking point, Helensville, and lawyer, MP Christopher Penk says.

By constitutional convention, respective roles played by our three branches of government are deliberately distinct. The “executive” (which is led by cabinet but includes all the civil service) basically runs the country. The “legislature”, aka parliament, passes laws defining the limits of that executive power, among other things. And the “judiciary” (our court system, more or less) applies the law, deciding each case on its individual merits in accordance with existing legal norms – without fear or favour and free from political pressure.

The doctrine demanding a separation of powers is a sacrosanct safeguard within our partly written, partly unwritten constitution. Its importance lies in preventing any one individual or group from gaining an outsized portion of power.

Taken together, constitutional safeguards have helped to keep New Zealand blessedly free of corruption in our short but proud history. Enjoying such stability and certainty is an international advantage that we should guard jealously and zealously. . .

He gives four examples where ministers’ behavior has weakened the constitutional framework:

* Andrew Little’s comments on a perceived problem with bail

* Little’s comment on the decision not to prosecute over the CCTV collapse.

* Clare Curran’s tweet on a police prosecution.

* Grant Roberston’s threat to make an example of landlords illegally raising rents.

In this country it’s pretty hard to hold a government to account when it bends, or even breaks, constitutional convention. That’s the thing about conventions, of course: for better and worse, they’re almost impossible to enforce. The flexibility of our constitutional arrangements is actually a real strength most of the time (whatever advocates of a comprehensive written constitution may say), so this is not a criticism but an observation.

That said, with few firm legal constraints in the form of “black letter law”, political accountability becomes all the more important. As Her Majesty’s Loyal Opposition, that is where we come in. And take note, ministers: we will.

The transition from opposition, where there is greater leeway for criticism, to government and cabinet where much more circumspection is required, isn’t always easy.

But that’s no excuse for bending the branches of government as these ministers have.

Adam Smith writes on this at Inquiring Mind.

 

 


Simple taxes better taxes

November 24, 2017

Former Finance Minister Sir Michael Cullen will chair the working group which is taxed with finding a fairier tax system:

Finance Minister Grant Robertson and Revenue Minister Stuart Nash announced the terms of reference for the group, which will come up with a series of recommendations by February 2019 which the government will then use to inform its policy direction at the next general election. Robertson said he isn’t making a grab for cash. Reforms could be fiscally neutral and he had an open mind on whether a capital gains tax would be necessary.

“The main goal here is to create a better, balanced and fairer tax system for New Zealand,” Robertson said. “Our belief at the moment is that we do not have that.”

The group has been told to consider the economic environment over the next five-to-10 years and how that’s affecting changing business models, demographics and business practices; whether some form of housing, land or capital gains tax would improve the system; whether a progressive company tax with lower rates for small businesses would improve the system and business environment; and what role tax can play in delivering environment benefits. . . 

The group has been told not to look at increasing income tax rates or the rate of GST, inheritance tax, a tax on the family home, or the adequacy of the personal tax system and its interaction with the transfer system. It has been directed to look at technical matters already under review such as international tax reform targeting multinational profit shifting, and the tax department’s business transformation programme.

While the issue of applying GST to goods and services bought online from overseas could be dealt with separately and was not part of the working group’s brief, Robertson said the group could examine exemptions from GST for particular categories of goods. Labour’s coalition partner in government, NZ First, has campaigned for years to remove GST from fruit and vegetables.

Robertson said the group will be able to look at the tax treatment on savings and investment, which has cropped up in previous reviews as an area in need of reform.

The best taxes are simple taxes.

Taking GST off fruit and vegetables sounds simple but it isn’t. If it’s all fruit and vegetables it will include processed ones which might have lots of sugar and salt added. But if it’s only fresh fruit and vegetables luxury imports like pomegranate will be exempt while frozen vegetables won’t.

Our GST is lauded around the world for its simplicity. Once you introduce exemptions it gets complicated, inconsistent and more expensive to administer.

National’s Finance spokesman Steven Joyce says the working group is underwhelming:

“Its Terms of Reference is written so that it will propose one significant thing at the end of it, a Capital Gains Tax,” Mr Joyce says.

“Yet Mr Robertson’s assertion on the current taxation of capital gains in the property market remains incorrect. People who buy and sell houses for a profit have those profits treated as income for tax purposes under the law today.

“So people can only assume once again that his unspoken desire is to introduce a Capital Gains Tax on farms and small businesses.” . . .

“Nothing will come out of this group that Grant Robertson doesn’t want. And all he wants is a recommendation for a Capital Gains Tax.

“Mr Robertson would be better to dispense with the expense to taxpayers and write out his tax policy for the next election when the time comes in the normal manner.”

I’m not opposed to a CGT per se, if it was fiscally neutral through reductions elsewhere. But as with GST, a simple CGT would be a better one.

Once there are exemptions there are loopholes which will be very good for lawyers and accountants but much less so for the aim of balance and fairness.

 


%d bloggers like this: