All jobs not equal

November 9, 2015

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

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

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

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

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

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

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

As Bill English said:

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

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

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

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

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

Quote of the day

September 30, 2015

. . . Labour’s problem may be summed up in two words: proportional representation. New Zealand’s MMP electoral system allows minor parties to thrive, thus removing the pressure on opposition supporters to transfer their allegiance to the party best placed to defeat the Government. By denying Labour the 5 to 10 percentage points it needs to become a credible competitor to the National Party, proportional representation and the Greens are encouraging the Right to contemplate permanent political ascendancy. . .  Chris Trotter

Quote of the day

August 19, 2015

“I am very disappointed the Labour Party has turned TPP into a political platform and broken what appeared to be a very constructive and bi-partisan position on trade,” he says. “However, I would like to think that when the deal is concluded and proceeds through the ratification process, this position will be reversed. There are enough rational thinkers on trade in the Labour Party to enable this to happen.”

Petersen also dismisses critics’ claims that NZ’s negotiators will sell off the country’s sovereignty in an effort to sign up to the TPP.

“I am close to the negotiations – without being directly involved – and I assure you our negotiators are not going to sell NZ’s sovereignty,” he said. “I would urge [the critics] to wait until the final deal is agreed before passing judgement on these aspects and I believe that when the deal is completed the NZ public will be surprised at how good it is and how ridiculous some of the claims have been.”Mike Petersen

Hypocrisy and sabotage would give Hobson’s choice

August 14, 2015

Labour went into last year’s election supporting the planned two-stage flag referendum process and promising to enact it should it become government.

Just a few month’s later the statesman like promise has been supplanted by childish posturing out of pique:

Labour’s Trevor Mallard said he opposed the process and believed it was not time to change the flag.

Mr Mallard said he would be ranking highest the worst possible alternative flag and ranking lowest the best possible one as his protest against it.

 It is hypocritical to say it’s not the time now when his party was fully supportive of the process last year.

And this isn’t just a protest, it’s an attempt to sabotage the process which allows us all to choose a new flag, or not.

He won’t do that by just voting perversely himself but by milking the opportunity for publicity by encouraging others to do it too.

Everyone who doesn’t want a fourth flag, or is open to change but doesn’t like the option we’ll be left with, will have the opportunity to vote for the current flag, which is our third, in the second referendum.

Given the number who don’t want change for genuine reasons and those who will oppose the change out of political pique, the chances are we’ll be stuck with the status quo anyway.

But Mallard isn’t prepared to leave people to choose or not, he’s going to do his best to give us Hobson’s choice.


Why bother with voters?

August 2, 2015

This headline should cause disquiet in anyone who cares for democracy: Peters: NZ First will decide 2017 election.

New Zealand First leader Winston Peters says he will be more powerful than ever by the next election and will decide the next government. . . .

Why bother with voters?

If he won’t give us the courtesy of explaining his intentions before the election and does what he’s done in the past, leaving us voting blind, why bother with an election?

He wants to be king maker but he’ still not willing or able to give a straight answer to a straight question.

. . .  You said you’d resign if you don’t get tens of thousands of new members? “Yeah, precisely. There’d be no sense going on.” That’s a commitment from you. Tens of thousands or you’re gone? “Yes”. Could we narrow that down – more than 10,000 or you’ll resign? “No, I said if we don’t increase our membership… Why don’t you ask a straight question?” But we did… “Well maybe I didn’t hear properly…stop your humbug.”

This old leopard won’t change his spots and he’s dreaming if he thinks he can increase his membership to that extent.

As a member of National, the only party in New Zealand which has tens of thousands of members, I know what it takes to attract and retain members.

If Labour with nation-wide electorate structures and unions helping can’t do it, Peters and his party which never stands in more than a handful of seats won’t have a chance.

So many shades of stupid

July 30, 2015

Andrew Little’s latest desperate ploy for publicity merely demonstrates so many shades of stupid.

. . . Labour leader Andrew Little has described God Defend New Zealand as “a dirge” and claims many Kiwis prefer to sing along to the Australian anthem. A dirge can mean a mournful song or a lament for the dead. . .

I will concede that the anthem is sometimes dirge-like and have blogged on that.

But that is only when it’s played that way.

If played at a decent tempo it is rousing as an anthem should be.

But to claim that many of us prefer to sing Advance Australia Fair?

As anthems go, it’s a good one but if many of the Kiwis he mixes with prefer to sing along to the Aussie anthem than our own it suggests he’s in touch with a sad subset of people and out of touch with the majority.

The stupidest thing about this outburst, though is the timing when he’s doing the best to sabotage the flag-change process in spite of being on record saying he not only favours a change he supports the referendum process for it.

Here’s Labour’s official policy from 2014:

Labour will: review the design of the New Zealand flag involving flag design experts and with full public consultation and involvement.

We believe that the time has come for a change and it is right for the issue to be put to the public.

And in case that isn’t clear enough, here’s his personal views from last October:

Q: Should NZ change its flag: What’s your personal opinion? Should there be a referendum? If you want the flag changed, what’s your favourite design?

A: Yes, my personal opinion is we should have something more relevant to an independent, small Asia/Pacific nation. I think a referendum is a suitable way to deal with an issue that can be very polarising. . .

Had Labour, perish the thought, got into government then not gone ahead with the consultation and referendum it would stand accused of breaking an election promise.

Going back on the commitment to change for petty political purposes and thereby politicising the process when the government has done all it can to involve other parties is at least as bad.

Given Little’s precarious position, when he’s failed to gain traction for himself and his party and he’s now even less popular than Winston Peters, he should be very careful about making funereal references.

Ask not for whom the dirge plays, it could be playing for his political ambition.

And to those who say the flag issue is merely bread and circuses to distract the masses, you have a very low opinion of the ability most of us to care and do something about more than one thing at a time.


Do we have consensus on tax?

July 20, 2015

Labour finally answered the calls to show us some policy last week with an announcement on proposed changes to provisional tax:

The bad news for Labour was that it wasn’t its own fresh policy it was reheated National Party policy:

Acting Minister of Finance Steven Joyce has congratulated Labour Party Leader Andrew Little on finally announcing his first “new” policy after eight months in the job, although unfortunately for Labour it’s a cut and paste of a previous Government announcement.

“Labour announced today it was launching a discussion document on changes to provisional tax for businesses. However it seems to have overlooked that the Government launched its own discussion document containing almost identical proposals back in March,” says Mr Joyce. “These in turn were based on National Party policy at the last election.”

The Government has already consulted on proposed changes to provisional tax including a business PAYE, changes to use-of-money interest and penalties, increased use of tax pooling and the use of tax accounts. A Green Paper was launched on 31 March this year and submissions closed on 29 May.

“Feedback on the Green Paper’s suggestions has generally been supportive, and provisional tax was the part most commented on. As we’ve said previously, the changes will require new technology to be implemented, which will be developed as part of the IRD’s Business Transformation project,” says Mr Joyce.

“Quite why Labour has started its own consultation is beyond me.

“Submissions are now closed but the Government would be happy to accept a late submission from the Labour Party in support of the proposal,” Mr Joyce says. “We also appreciate its implied endorsement of the Business Transformation process that will make these policy changes possible.”

A link to  the March announcement can be found HERE.

A link to the Government’s Green Paper, Making Tax Simpler, can be found HERE.

A link to the National Party’s 2014 election policy on this issue can be found HERE.

Act supports the ideas in the green paper which the government released in March, last week New Zealand First also mooted a similar strategy and the Green Party is also open to the proposed changes.

The good news for all of us is that this could mean there is consensus on provisional tax which is very unpopular with businesses for good reason.

They have to pay on expected income without the benefit of a crystal ball that can give them an accurate forecast of their futures costs and income.

A reasonably accurate estimate is difficult enough for any business, it is particularly taxing in farming where there are so many variables and a lot of income is lumpy.

Dairy farmers get monthly payments for their milk but last year the pay out was far higher than expected, this year it is much lower.

Cropping, sheep and beef farmers and many horticulturists get most of their income in a very few payments a very few times a year. Estimating what they are likely to produce, how much that will cost and what they’ll be paid for it months in advance with any deegree of accuracy is next to impossible.

The changes proposed by the IRD which now seem to have support across the political spectrum would simplify the tax system.

Simpler taxes are less expensive to comply with and administer. That reduces costs for businesses which is good for them and the people they employ, service and supply.


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