An expensive week

18/12/2020

It’s been a very expensive week for the taxpayer.

There’s the $333,641.70 Parliamentary Services paid for Trevor Mallard’s loose lips – and that’s likely to increase once an employment dispute is settled.

That was followed by the steep increase to the minimum wage, which might add to costs of the lowest paid in the public service and will add costs to all businesses.

As Lindsay Mitchell pointed out it will also increase the cost of benefits.

. . . Down the track it will lift the incomes of many more now that beneficiary rates  are linked to wage inflation. . . 

. . .It makes life harder for businesses and there is no increased certainty about supply of labour if benefit payment rates are competing. Earlier Henry Cooke calculated, “…benefits will go up between $27 and $46 a week by April 2023 – between $10 and $17 a week higher than they would under the old formula.”

To maintain relativity employers will be pressured to raise the wages of those above the minimum wage and are likely to pass their increased costs along to customers and nobody will be any the better for it.

It’s going to be difficult for the Reserve Bank to keep a lid on inflation. . . .

Inflation will negate any benefit from wage increases.

Then there’s the $29.9m paid to Fletcher Building for the land it was to develop for housing at Ihumātao.

It’s not just this payment, it’s the damage it’s done to property rights and the risk it poses to Treaty settlements:

National’s finance spokesman, Michael Woodhouse, said taxpayers were paying for the Government’s bungling of a land dispute.

“Taxpayers aren’t a bank to be called upon to clean up the Government’s poor decisions, particularly when it is meddling in private property rights,” Woodhouse said.

“The Prime minister should never have involved herself in the Ihumātao dispute and taxpayers shouldn’t bailing her out now.

“The ramifications of this Crown deal go much further than the lost opportunity of building houses immediately. It will call all full and final Treaty settlements into question and set a dangerous precedent for other land occupations, like the one at Wellington’s Shelly Bay.

“More than 20,000 Kiwi families are on the waiting list for a home this Christmas. The Government should not be spending $30 million on stopping 480 much-needed houses from being built right now.” . . 

The costs aren’t just financial.

The man defamed by Mallard lost his job and now has health problems.

The steep increase in the minimum wage will cost jobs and could be the last straw for businesses already in a precarious state.

And the political interference at Ihumātao has cost 480 desperately needed houses.

This is a very expensive start to the new government’s term.


Property rights matter to all

24/09/2019

Who’s standing up for property rights?

The Government’s handling of Ihumātao has shown it has no respect for property rights, Leader of the Opposition Simon Bridges says. 

“It’s been eight weeks since the Prime Minister told Fletcher Buildings it had to stop developing much needed houses on land that it owns. Since then, Fletchers has not been invited to be part of negotiations. It’s had to sit on the side-line as others have tried to take away its rights.

“It has set an appalling precedent for a Prime Minister to insert herself into the business of a private company and prevent it from building 480 much needed houses.

Does the Prime Minister even have the right to tell a company it can’t go about its lawful business on its own land?

“No wonder business confidence has plummeted when the Prime Minister shows such blatant disregard for businesses and property rights.

“It doesn’t matter where in the world the Prime Minister is, it’s time for her to set the record straight. She needs to tell the protestors to go home, make it clear that the Government won’t be spending taxpayers’ dollars on buying the land and rule out any sort of deal.

“This matter doesn’t concern her. It’s time to butt out and give Fletchers back the land they legally own.”

Jacinda Ardern’s interference has done nothing to solve the problem. It’s made it worse.

If the government gives, or loans, the Iwi anything at all towards purchasing the land, it will open up the opportunity for every other iwi to renegotiate what were supposed to be full and final Treaty settlements.

Worse than that, it has sent a very clear message it doesn’t respect property rights which are a fundamental building block of democracy.

Private property was exempt from treaty settlements for a very good reason. The wrongs treaty settlements were to compensate for were started when Maori property rights were ignored in the past and could not be righted by infringing other people’s, including those of Maori, in the present and future.

Property rights matter for everyone and it is well past the time when the Prime Minister’s interference in Fletchers’ right to exercise theirs must stop.


Full & final

20/09/2019

The Ihumātao dispute is getting messier and government interference is to blame.

When it began, Mana Whenua had an agreement with Fletchers, who own the land.

Then, Prime Minister Jacinda Ardern called a halt to any building while negotiations continued and now Mana Whenua have backed out of the agreement with Fletchers and are siding with the protesters in wanting the land back and she’s not ruling out buying it:

. . . But there was a breakthrough on Wednesday, with the Māori King announcing all mana whenua “want their land returned” and calling for the Government to negotiate with Fletchers “for the return of Ihumātao to its rightful owners”.

While National Party leader Simon Bridges quickly called for the Government to reject entering into such negotiations, Ardern is refusing to rule it out.

Speaking from Japan, Ardern said she was “incredibly grateful” for the work Kiingitanga had facilitated but wouldn’t say what action the Government would take. 

“There is still a bit more work to be done, but we will be mindful, as we go from here, of issues like Treaty precedent, the commercial interests, but also the heritage issues,” she said.

“At this stage, our focus is on picking up the good work that has been done by Kiingitanga.”

She wouldn’t discuss whether Auckland Council should be a party to negotiations with Fletchers, calling that speculative.

Bridges said on Wednesday that Fletchers legally owned the land and if the Government began negotiations, it could set a precedent.

“If this settlement is brought into question then so will all other full and final Treaty of Waitangi settlements,” he said. 

A spokesperson for Kiingi Tuuheitia said on Wednesday that the return of land was “outside of the Treaty of Waitangi settlement process” and called for an “innovative and modern solution that does not financially disadvantage iwi”.  . . 

The government buying the land off Fletchers is not an innovative and modern solution it would be the start of another, very expensive problem.

Treaty negotiations have always ruled out private land and been agreed as full and final.

Wrong was done all those years ago and the amount Iwi have got in settlement of its grievances is well below the value of what was taken, but that doesn’t alter the agreement nor can it open up a re-negotiation when the younger generation feel their elders didn’t get enough.

If the Iwi want to buy the land and Fletchers are willing to sell it there is no problem.

But if Fletchers don’t want to sell and/or the Iwi aren’t prepared to buy it but want the government to, there is a very big problem.

And while all this is going on, the building of the much-needed houses can’t start at great cost to the legal owners of the land.

The government’s interference has made matters worse and is yet another signal that it doesn’t understand and has no sympathy for business.


KiwiBuild failed

05/09/2019

The government’s KiwiBuild reset is an admission of how flawed the policy was in the first place.

The 10,000 houses it said it would build wasn’t a target, it was a figure plucked out of the air, completely distanced from reality.

Worse than the unrealistic number, was the money wasted on houses no-one wanted to buy and houses sold to people who should not have been beneficiaries of taxpayer assistance.

Now Housing MInister Megan Woods has announced another plan, with no targets, which includes selling the houses no-one wanted – almost certainly to be a win for the buyers and a lose for the public.

There’s also a government backed low equity scheme that sounds horribly like the Fannie Mae and Freddie Mac scheme in the USA that precipitated the Global FInancial Crisis.

The Taxpayers’ Union points to the potential  dangers that poses to taxpayers:

Replacing KiwiBuild with easy credit policies for first home buyers places significant risk on taxpayers, says the New Zealand Taxpayers’ Union. 

Taxpayers’ Union Economist Joe Ascroft says “The American housing crash and ensuing Global Financial Crisis was driven in part by the American Government’s decision to offer subsidized mortgages to low income households, who then failed to meet debt repayments when interest rates increased. Our Government’s decision to adopt a similar approach by offering taxpayer-backed mortgages to households who can only scrape together a 5 percent deposit is an uncomfortable echo to those easy credit policies which induced a housing crash overseas.”

“If households on ultra-low deposits ever failed to meet repayments due to rising unemployment or interest rates, either taxpayers or the banking system would be put under significant pressure.”

“Of course, the best approach to housing unaffordability isn’t to load on more debt and subsidies – which will inevitably push housing prices higher – but to enact meaningful supply-side reform. Allowing our cities to become more dense and removing the rural-urban boundary would be good places to start.”

The new policy, like many of this government’s lack details and the Minister’s repeated “we’ll build as many as we can as quickly as we can” is no substitute for a target tand a concrete plan to get there.

The root of the housing problem is simply one of supply not keeping up with demand, this hasn’t been helped by Prime Minister Jacinda Ardern’s calling a halt to development at Ihumātao.

The solution is more houses, faster which requires sorting out the infrastructure restraints, regulations that make the consent process so long and costly, and building here so much more expensive than in many other countries.

Anything which gives people more money without increasing the supply of houses will only make them more expensive.

KiwiBuild failed because it didn’t deal with the underlying causes of the problem and the so-called reset will do very little, if any, better.

We’d all benefit if the government set about addressing the constraints on supply rather than throwing more taxpayers’ money at policies that will benefit a relatively few people at considerable cost and risk to all of us.


Finlayson has answer to Ihumātao

23/08/2019

Former Treaty Negotiations Minister has the solution to the Ihumātao impasse:

“The hīkoi should turn around and not march to the Prime Minister’s office, but march down to Tainui,” he told The AM Show on Thursday, saying the solution to the standoff is “blindingly obvious”.

“All the iwi that have settled around this area have Tainui links. Kiingi Tuheitia’s been there. I think it’s a fantastic opportunity for Tainui to step up – they’re very, very wealthy – and say, ‘Right – we’ll buy the land commercially. Nothing to do with the Crown at all.'”

Tainui was the first iwi to cut a deal with the Crown in the mid-1990s, and has since turned its $170 million into holdings of more than $1 billion. . . 

“The hīkoi should turn around and not march to the Prime Minister’s office, but march down to Tainui,” he told The AM Show on Thursday, saying the solution to the standoff is “blindingly obvious”.

“All the iwi that have settled around this area have Tainui links. Kiingi Tuheitia’s been there. I think it’s a fantastic opportunity for Tainui to step up – they’re very, very wealthy – and say, ‘Right – we’ll buy the land commercially. Nothing to do with the Crown at all.'”

Tainui was the first iwi to cut a deal with the Crown in the mid-1990s, and has since turned its $170 million into holdings of more than $1 billion. . .

Dr Finlayson, having looked through property deeds, cast doubt on whether the land was actually confiscated in 1863 as the protesters claim.

“But it was still confiscated – that seems to be the case – although there’s some debate about by whom and when.”

Asked why the protesters hadn’t asked Tainui to flex its financial muscle, Dr Finlayson said it’s because the “kneejerk reaction” is always “go to the Crown”. . .

This is a dispute within the iwi, let the iwi buy the property, at a commercial price, and leave it to them to sort it out amongst themselves.

Private property is left out of the Treaty settlement process for very good reason but the money given to iwi in compensation for past wrongs can, and often is, used to buy land that was taken from them.

It could be done in this case without setting a precedent that would undermine any Treaty settlements.

This is an elegant solution from the man who has Minister, settled 59 Treaty claims.

 


Why so glum?

08/08/2019

The quarterly unemployment rate is down to 3.9%; and the official cash rate is at an historic low of 1%.

Yesterday’s GlobalDairyTrade was down 2.6%, the fifth drop in the last six auctions but no-one’s suggesting the milk payout will be lower than $6.

Horticulture and wine are getting healthy returns, arable incomes are reasonable, wool is dismal but the outlook for sheep meat and beef is positive.

But Business confidence is down to -44.3% :

. . .That was the worst reading since August last year, when the index was at -50.3. Employment intentions slumped (-5.5 vs 0) as firms sought to cut jobs, capacity utilization weakened to its lowest since 2009 (0.4 vs 5.3), and activity outlook (5.0 vs 8.0) and export expectations (1.4 vs 5.3) deteriorated. In addition, profit expectations fell further(-16.3 vs -12.5), while investment intentions turned to negative (-0.3 vs 2.5). . . 

And consumer confidence is also gloomy:

The Westpac-McDermott Miller consumer confidence index in New Zealand fell to 103.5 in the second quarter of 2019 from 103.5 in the previous period. Households became increasingly worried about conditions in the global economy over the next five years (-3.5 points to 11.9); and the number of households who think now is a good time to purchase a major item has fallen to a two-year low (-5.5 points to 17.9).  . . 

Why are we so glum?

Today’s historic cut to the Official Cash Rate down to just one per cent sounds a dramatic warning that the New Zealand economy is slowing and the Government needs to get serious about growth, National’s Finance Spokesperson Paul Goldsmith says.

“The Reserve Bank’s cut came with the message, ‘Indicators of growth remained weak or weakened further over the past few months’.

“The only time in the history of the OCR there has been a cut of this magnitude have been after the 9/11 terrorist attack, during the Global Financial Crisis, and after the Christchurch earthquake.

“Of greatest concern is the absence of any clear growth plan from this Government.

“Budget 2019 was devoted almost exclusively to spreading national wealth, with very few policies to grow the economy. The most expensive Budget commitment to transform the economy was a $1 billion subsidy for rail. There was little else.

“Instead of ramping up infrastructure investment, the Government has stopped or postponed a dozen roading projects which were ready to get underway, and replaced them with projects that aren’t ready to go, and won’t be for a lot time yet’.

“We need to move beyond policies that add costs to the business and drive down business confidence.

“National would revive the economy by having a plan for growth which would see confidence bounce back and the economy gain the strength it’s lost under this Government.”

There is no doubt what the government is doing and not doing are a large part of the problem.

In spite of at least reasonable returns for almost all primary products farmers feel under-siege with very real concerns about the costs and restrictions the government will impose on them.

Other businesses have similar worries, not helped by the latest confidence-sapping message sent by the Prime Minister’s ordering Fletchers to not build anything until the Ihumātao dispute is settled.

Then there’s the on-going argument over the letter Associate Transport Minister Julie Anne Genter is refusing to release and the questions that raises over the part she played in delaying Wellington transport plans.

Concerns over this aren’t helped by claims from Wellington City Councilors that the Green Party confidence and supply agreement would have been put in jeopardy if a watered down Let’s Get Wellington Moving wasn’t accepted.

All of this points to government instability and is compounded by Winston Peters’ latest game playing over requiring a referendum on changes to abortion law.

When interest rates were already so low, it is unlikely the larger than expected drop in the OCR will have much impact on the productive economy when there are so many reasons pointing to the need for caution.

And while low interest rates help borrowers they punish savers.

All in all there is little to give anyone confidence anything is going to get better soon and plenty of reasons to doubt the government has the plans and policies to help.

And now the Reserve Bank has dropped the OCR, it raises the question of what happens when, as is likely, economic conditions get worse.


Government vs activism

05/08/2019

The Green Party excluded the media from most of its conference, contradicting its vision of openness and transparency.

One reason for that was probably because that the party didn’t want the public to hear from members like this.

Ahead of the party’s annual general meeting in Dunedin this weekend, Jack McDonald said he would not be running as the Te Tai Hauauru candidate in next year’s election.

He would also not be seeking re-election as the Greens’ policy co-convenor.

He said the party’s direction was one of the factors.

“As an indigenous ecosocialist the last few years have been tough; the 2017 campaign, Metiria’s [Turei] resignation, and the continued centrist drift of the party’s direction under James Shaw’s co-leadership.

“When the IPCC [Intergovernmental Panel on Climate Change] says we have 12 years to save the world from climate catastrophe, we simply don’t have time for centrism, moderation or fiscal austerity.” . .

This is what happens when activism comes up against the realities of government.

In spite of the screaming from climate alarmists, the majority of people support centrist and moderate policies and are not ready for the economic sabotage that dark green activists like McDonald and his ilk would inflict on us.

The difference between government and activism hasn’t got through to Green co-leader Manama Davidson and her colleagues who have blundered into the ​Ihumātao protests.

That their party supports the government but isn’t in it is a distinction without a difference to most people. Their joining a protest which tramples over property rights and threatens the Treaty process is the action of activists not MPs.

The other co-leader James Shaw usually acts like an MP but in an interview on The Nation he slipped into activist mode:

Look, I would never empower someone with as little personal integrity as Simon Bridges to become prime minister.

about which Adam Smith at the Inquiring Mind blogs:

. . . I have ceased to be surprised at just how often leading Greens seem only to honour these values in the breach.

Shaw in his vile and obnoxious comment showed just how far the Greens have deviated from their values.

It is high time they were called out for continually donning a cloak of moral sanctimony and pretending to be above the fray, when in fact they are as nasty and vicious as anyome else in the bearpit of politics.

Quite.

 


Property rights crisis

27/07/2019

Yesterday morning Labour Maori caucus co-chair Willie Jackson said government would find itself in serious trouble if it started disregarding iwi mandates when it came to Māori land:

Mr Jackson said he sympathised with those on the frontline, but the government had to respect the settlement. . . 

Mr Jackson said he understood that some felt ripped off, but warned that siding with anyone other than those with the mandate was a dangerous path.

“The day we walk away from mana whenua is the day we might find ourselves in real trouble. Right now we’re committed to supporting to what they’ve signed up for – as hard as that might be,” he said. . . 

Mr Jackson said there were people on the frontline who felt a strong sense of injustice but when those who have rights over land make a decision – like the deal done with Fletcher – the government had to support that.

“We understand the hurt but sometimes people, particularly our mana whenua, have got the right to make these decisions and we’re not going to say you’re wrong and get out of there. I know others are doing that but we wouldn’t be so bold or so arrogant,” he said. . .

Just a few hours later the Prime Minister was, by that definition being bold and arrogant:

Prime Minister Jacinda Ardern has vowed that no building will take place at Ihumātao while the government and other parties try to broker a solution. . . 

“We have heard, here, the strong voice of young people,” Ms Ardern said.

“At the same time we hear the perspective of mana whenua.

She said the government had to address that there had been an escalation and that’s why the call was made to hold off on building work.

“That activity cannot take place while there is such a large gathering there. . .

Not only is this putting the angst of protesters ahead of what mana whenua have agreed with Fletchers,  it’s a u-turn on her previous position:

Earlier this week, Ms Ardern said the government would not intervene in the issue.

“Ultimately we are falling on the side of the local iwi [who support the housing development] and their position. They are not the ones leading the protest here and so if we come in over the top, it really would be undermining the local iwi in this case,” she said on Wednesday.

By last night the show of force by protesters appears to have persuaded her to not only undermine the local iwi, but to trample all over Fletcher’s property rights.

It is also poking its nose into what is essentially a family dispute.

This was a point made by former Labour MP and  former Minister of Māori Affairs Samuel Dovers Dover Samuels who called Magic Afternoons with Sean Plunket with a stark message to politicians and media regarding Ihumātao: Stay out.

He told Sean that this is an internal matter for the family to figure out for themselves. Interference form the media and politicians has fanned the flames of this dispute, he says, “I just can’t see the involvement of any politician as being helpful.”

(Click the link above if you want to listen to the full interview).

RNZ explains the history and why Ihumātao is being occupied by protestors.

It is complex but:

. . .Earlier this year, Te Kawerau Iwi Tribal Authority & Settlement Trust, who support the housing development, put out a statement saying:

“This piece of land within the development area will be the first time since the land confiscations of 1863 that land will be returned to mana whenua. The agreement to have this land returned to mana whenua was negotiated between Fletchers, Makaurau Marae Māori Trust and Te Kawerau Iwi Tribal Authority. Auckland City Council was consulted during this process.”

Fletcher’s have committed to returning 25 percent (eight hectares) of the land they own to the Kiingitanga.

“Returning the land is a first for a corporate like Fletcher Building,” said Fletcher Building Residential chief executive Steve Evans.

This isn’t a Māori versus Fletcher issue – on both sides are members of the same iwi, hapū and whānau. . . 

If the issue is complex, the underlying principle is not.  Everyone, not least the government, should be respecting property rights.

This point was made by Act leader David Seymour:

. . Jacinda Ardern has legitimised unlawful behaviour by capitulating to an illegal occupation as her opening move.”

“The PM has cultivated a brand of a kinder, more inclusive politics, but some things such as occupying private property are always wrong. She has just sent the message: ‘if you occupy private property, the Government will take your side instead of protecting property rights.'”

“It appears that the Prime Minister has prevented the legal owners of land from carrying out a consented development, and offered the protesters a seat at the table.  . .

Maori property rights were ignored when the land was originally taken. Redress for that was made under a Treaty settlement.

Fletcher Building has gone beyond what is legally required in returning  25 percent of its land to the iwi. It will be building nearly 400 much-needed houses on the rest, some of which will be sold to members of the iwi.

That some think this is not good enough is no justification for the government to interfere and, in doing so, undermine Fletcher’s property rights.

Private property has, for very good reasons, been exempt from Treaty of Waitangi settlements.

Government giving way to protestors like this sets a very, very dangerous precedent that is in danger of precipitating a property rights crisis.


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