Illiberal left

June 9, 2013

Do LabourGreen and New Zealand First understand what they’re doing in calling for a police investigation over the leaking of the GCSB report?

Politics lecturer Brent Bryce Edwards rightly says they’re being illiberal:

“There’s always problems when the police get involved in the political and media realm. It can have a very chilling affect on politics and journalism,” Dr Edwards says.

Threshold not reached
Generally those that regard themselves as politically liberal will not want the police involved unless utterly necessary, says the Politics Daily compiler.

“Therefore the threshold for calling the cops into Parliament and newsrooms should be very high. It’s hard to see that this threshold has been reached in this case,” Dr Edwards says.

“Normally those that call the police in on their political opponents are from an authoritarian political philosophy. By contrast, liberals generally regard those that leak government department reports as heroic whistleblowers that are enabling the freedom of information and the right of the public to know what those in authority are doing.”

That was certainly the case when, Tracy Watkins reminds us,  Labour’s Phil Goff was gleefully leaking sensitive Cabinet documents relating to Foreign Affairs.

He almost certainly got the papers from a public servant who, like an MP, is supposed to keep confidential matters in confidence and, unlike an MP, be non-partisan in his/her work.

Jane Clifton reminds us:

The affair does underline the dichotomy we in the political firmament face over the issue of leaks, though. Labour and New Zealand First are harrumphing like scandalised Wodehousian aunts about Dunne’s behaviour. Yet both have received, publicised and gloated over similarly spicey leaks in their time.

Leaks have come to the Opposition from two of the most sacred departments, the Ministry of Foreign Affairs and the Government Security Communications Bureau, at times in farcical quantity. Information from these bureaucracies have the potential to harm this country’s security and trade.

It’s a very unhealthy sign that such officials are prepared to undermine the Government by leaking information that could also undermine the welfare of the country. Yet the Opposition has trafficked in them with abandon, and never has a single Labour, Green or NZ First politician called the police about such documents, as they have done over the Dunne situation.

Clifton goes on to remind us that leaks are undeniably desirable for the media and the public who learn from them.

Calling for a police investigation is at best baffling and definitely hypocritical when all three parties have benefited from leaks, the most recent being of the Henry report to Peters.

Would he like an investigation into that one too?


OECD doesn’t back LabourGreen CGT

June 7, 2013

New Zealand’s economic policies have been endorsed by the OECD.

The Organisation for Economic Co-operation and Development has confirmed New Zealand’s macroeconomic policies strike the right balance between supporting the recovery and ensuring sustainable medium-term growth, Finance Minister Bill English says.

In its Economic Survey of New Zealand for 2013, the OECD also notes the economy is gaining momentum, with post-earthquake reconstruction in Canterbury, and business investment and household spending gathering pace.

“The OECD confirms the Government’s economic plan is on the right track,” Mr English says. “In particular, it notes our work in improving productivity to support long-term growth, it confirms the banking system is in good shape and well supervised, and it supports our focus on getting back to surplus and reducing debt.

“It concludes that reducing government debt will establish a favourable starting position for confronting longer-term cost pressures from an ageing population. It will also tend to raise national saving rates and reduce New Zealand’s external vulnerabilities.

“This is a welcome endorsement of the Government’s economic programme from the OECD, coming just a few weeks after the International Monetary Fund also confirmed we have struck an appropriate balance with our programme.”

Mr English agrees with the OECD’s assessment that New Zealand’s high private debt levels, large external imbalances and an over-valued exchange rate are among the main risks to growth.

“That’s why the Government is taking a number of steps, such as through the Business Growth Agenda and the internationally-focused growth package in the Budget, to help businesses and exporters become more competitive and to sell more to the world.

“While the OECD’s modelling predicts relatively small growth impacts from achieving some of the specific Business Growth targets, taken as a package evidence suggests they could make a material difference to productivity and incomes,” Mr English says.

The OECD notes that New Zealand policymakers are increasingly attuned to social equity and welfare issues.

It says welfare reforms are attempting to reduce long-run benefit dependency by emphasising education and training for at-risk youth, placing more conditions on beneficiaries and requiring stronger accountability from public and private providers.

“I’m pleased with the OECD’s positive assessment of the main elements of the youth package within our welfare reforms, and other recent changes to increase educational achievement and reduce youth unemployment.

“We will carefully monitor progress to ensure we further improve the participation of young people in education and training.”

One area the OECD report differs from the government’s policies is a Capital Gains Tax.

Mr English says the Government does not agree with the OECD about the need for a comprehensive capital gains tax applying to all assets, including the family home.

“Two comprehensive, expert reviews of New Zealand’s tax system – the 2001 Tax Review and the 2009 Tax Working Group – did not recommend a widespread capital gains tax of the sort the OECD recommends.

“The Government significantly tightened the tax rules around property investment in Budget 2010, which is expected to raise an additional $3 billion in tax revenue over four years.

Labour and the Green Party policy is for a CPT and they’ve seized on the OECD report as vindication of their stance.

However, that conveniently overlooks the report’s recommendation that a CTG covers the family home and replaces other taxes.

The LabourGreen version would exclude the family home and those parties wouldn’t reduce other taxes.

Labour lost the argument over this in parliament on Wednesday:

Hon David Parker: Why does he continue to refuse to adopt a capital gains tax excluding the family home when it is clear it would reduce inequality, it is clear it would take the pressure off house prices, and it is clear some people would pay their fair share of tax, and, at the same time, it would improve the economy?

Hon BILL ENGLISH: If a capital gains tax had all those magical powers, then you would not see a whole lot of developed country economies on their knees because of excessive housing markets. We have not implemented it, for a couple of reasons. One is that we believe the other tax measures we have taken, which are collecting $3 billion in tax revenue over 4 years, are more effective, and, secondly, we believe that changing the planning laws to allow more supply of houses will have a much bigger impact on fixing wealth inequality than a capital gains tax.

Rt Hon John Key: Has he seen any reports about a period of time between 1999 and 2008 when there was a substantial increase in the housing market in New Zealand and when there was a major amount of work done, to extent that half of the work of the Department of the Prime Minister and Cabinet was about the housing market, and, by the way, was there a recommendation for a capital gains tax that was adopted in that period of time?

Hon BILL ENGLISH: It is funny you should mention that. Some of the things the last Labour Government did were sensible. In 2001 it commissioned a tax review—a comprehensive review of New Zealand’s tax system. That review concluded that a capital gains tax that exempted the family home would not be effective. Faced with the fastest-rising housing market in New Zealand’s history through the mid-2000s, the previous Labour Government, in which most of the Opposition’s current front bench served, did not implement a capital gains tax. . . 

Hon David Parker: Is the truth of the matter not that Mr English and his colleagues stopped the Savings Working Group and others looking at a capital gains tax by putting it out of their ambit, and is it not the reality that National’s refusal to introduce a capital gains tax is because it does not suit the vested interests of its backers?

Hon BILL ENGLISH: Well, with, I think, 47 percent of New Zealanders voting for the National Government in the last election, we are very pleased to represent a very broad range of backers—in fact, a much broader range of New Zealanders than the Opposition Labour Party, which claims to represent everybody. No, the reason we have not implemented a capital gains tax is that when you exempt most of the housing market, it becomes a tax purely on successful, profitable businesses, and that would be bad for growth. We are addressing the problem of rising house prices by addressing the real issue of the lack of supply, particularly in Auckland.

How typical – LabourGreen have a policy which wouldn’t address Auckland’s housing affordability and would be a tax on successful, profitable businesses which would be bad for growth.

Offsetting Behaviour also argues against a CGT:

 

 

 

 

 


LabourGreen power play flaws exposed

June 5, 2013

Electricity Authority chair Brent Layton has exposed the LabourGreen power play flaws.

He agrees with other experts who say their plan will lead to blackouts, less investment in renewable power projects and shrink the New Zealand economy.

He says the cost of a regulator transferring wealth under such a centralised power-buyer proposal would have a “chilling effect” on investment, which is likely to be “large, widespread and long-lived”.

“Either the government will be forced to build future plants, and many other assets, or shortages of electricity and other services will be likely.”

The authority is an independent Crown entity tasked with ensuring the efficient operation of the New Zealand electricity market, promoting industry competition “for the long-term benefit of consumers”.

Dr Layton, a former New Zealand Institute of Economic Research chief executive, says a centralised power buyer would require a large bureaucracy and an “army” of generator staff supported by consultants.

“Given the inefficiencies of the central decision-maker arrangement, the result will be to shrink the size of the New Zealand economy because more resources would be needed to operate the market than under the current arrangements for a less efficient outcome.” . . .

. . .Dr Layton says this “pay-as-offered” model will lead to either increased inefficient spilling of renewable energy from hydro-electric dams or severe constraint on further investment in renewable generation projects, “even if it would be efficient to do so”.

“The authority does not believe this outcome would be of long-term benefit to consumers.”

He also busts the myth hydro-electricity generators are earning super-profits because their fuel – water – is free. Rather, it is offset by the cost of capital to build dams, he says.

Dr Layton says claims there is a price-fixing cartel by generators have been investigated by the Commerce Commission and has resulted in no prosecutions. . .

Who has more credibility:

The man who heads the organisation tasked with ensuring the efficient operation of the New Zealand electricity market, promoting industry competition “for the long-term benefit of consumers”.

Or political parties who think politicians and bureaucrats know more than the market?


Wacky, extreme, unusual

May 31, 2013

Question of the day:

Hon Steven Joyce: Has he considered getting a really big colour photocopier and printing off enough money to pay off New Zealand’s international liabilities, on behalf of all New Zealanders, sometime next week?

Mr SPEAKER: I do not think that is a helpful question, but if the Minister wishes to answer it the Minister can.

Hon BILL ENGLISH: We have been advised to consider it, but I understand that the whole supply of them has been bought up by the Green Party, in anticipation of its opportunity.

I wonder where the advice came from?

It certainly wasn’t the Prime Minister who considers LabourGreen policies wacky, extreme and unusual.

That’s a view with which a majority of voters have sympathy:

When asked who they would trust more to run the economy, 55 percent of respondents preferred a National-led government with John Key and Bill English.

A Labour-Greens government with Mr Shearer and Dr Norman had the support of 37 percent of respondents.

Eighteen percent of Labour voters trusted National more, as did 19 percent of Green voters.

Nearly a fifth of their own supporters trust National more – that’s hardly a ringing endorsement of their own policies.

A tale of two polls

May 27, 2013

TV3 says LabourGreen are closing the gap on National:

National remains on top, with 47.3 percent – down 2.3 percent. Labour goes up to 33.1 percent; that’s up 2.9 percent. The Greens are up a tad, at 12 percent.

New Zealand First drop to 2.2 percent, beneath the 5 percent threshold required for leader Winston Peters to get back. . .

Patrick Gower says that’s proof the LabourGreen power play appeals to voters.
But TVNZ says National could rule alone:

National has jumped six points and is sitting pretty on 49 percent.

Labour has dropped three points, now at 33 percent.

The Greens have lost a big chunk of support, now in single digits on nine percent, while New Zealand First picked up a point to be on four percent. . .

Both polls are close enough to each other and both show that National is still fairly close to the support it got in the 2011 election which is an amazing feat given the natural and financial challenges the government has had to tackle.

But polls aren’t elections and there’s still nearly a year and a half until the next one.


Green hypocrisy

May 25, 2013

State Owned Minister Tony Ryall has correctly applied the H word to the Green Party:

The Government says it’s hypocritical of the Green Party to criticise the number of ‘mum and dad’ Mighty River Power investors, when they were responsible for “frightening them off”.

State-Owned Enterprises Minister Tony Ryall is defending using ‘mum and dad investors’ in the Government’s sales pitch of the shares, despite Greens co-leader Russel Norman calling it a “con”. . .

. . . Mr Ryall responded to those claims this afternoon, saying there was a huge turnout of first time investors, or ‘mum and dads’, despite a plan by the Greens and Labour to “sabotage” it.

He says there were 77,000 first-time investors and more than 101,000 people invested less than $15,000 in the company.

“The Green Party are being hypocritical, saying not enough everyday New Zealanders bought shares, while at the same time they are doing their level best to frighten them off.” . . .

“Over 76,000 people invested less than $5,000 on Mighty River shares and they got everything they asked for,” says Mr Ryall.

“That is a huge achievement despite the economic sabotage of the Green Party and Labour during the float.”

Mr Ryall says investors who were not ‘mum and dads’ had their shares reduced due to demand.

I know several people who were planning to dip their toes into the share market by buying Mighty river Power shares who got cold feet after the LabourGreen power play.
It is indeed hypocritical for Norman to complain that not enough everyday New Zealanders bought shares when their quest for publicity and economic ignorance caused some of those who would have bought to change their minds.

Spending well not up

May 17, 2013

Finance Minister Bill English’s fifth Budget is characterised by spending well rather than spending up.

Budget 2013 has freed up a further $1.5 billion by redirecting spending to where it delivers the best results, Finance Minister Bill English says.

This takes the total amount of reprioritised government spending since Budget 2009 to $14.9 billion.

“At a time when the Government’s finances are constrained, reprioritising spending allows significant additional funding for new or proven initiatives that get better results for New Zealanders,” Mr English says.

“It’s about spending well, not spending up.”

In total, Budget 2013 includes new spending initiatives worth $5.1 billion in the current year and over the next four years, paid for by a combination of new spending and $1.5 billion in reprioritisation and new revenue initiatives. Those savings and revenue initiatives include:

  • Tax and revenue changes that net an extra $313 million over four years.
  • Reprioritisation of $641 million to new spending initiatives within Budget votes.
  • Reprioritisation of $252 million of savings from across budget votes into significant new spending initiatives in areas like health, education, welfare reform, and science and innovation.
  • $303 million from existing contingencies.

“These savings are consistent with the Government’s approach across its five Budgets, which have together reprioritised almost $15 billion of spending,” Mr English says.

“New Zealanders were conditioned in the 2000s to believe that Budgets should be about the novelty of new, expensive spending programmes that held out promises of economic and social transformation. Those promises were illusory.

“There was no sustainable revenue stream to pay for the increased spending and there was nothing genuinely transformational to show for it.

“Governments should be judged on what they achieve rather than on what they spend. The value of our spending is a better measure than the amount of our spending. This Government is focused on results, and it’s paying off.   

The idea that a government should be judged on its achievements rather than its spending is a relatively new concept.

Budgets used to be focussed on spending and people waited with excitement to see what was in it for them.

The steep increases in spending from 2005 until 2008 show the cost of Labour’s pre-election lolly scramble.

National changed that, improving results rather than increasing expenditure, even going so far as to deliver a Budget with no increased spending in election year.

John Key, Bill English and their team changed that, making a virtue out of restraint and they’re getting results.

“For example, recorded crime is at a 24-year low, and we’re rolling out new technology for frontline police officers, but the baseline funding for Police is not being increased.  Instead, Police are finding more efficient and effective ways of doing their job which is generating savings they can reinvest.

“At a time when many governments overseas are undertaking radical cuts to get their books in order, we are enhancing high-quality frontline public services while maintaining support for our most vulnerable citizens. That is a real achievement.

“The Government will ensure future Budgets continue to focus on improving frontline public services to deliver better results for New Zealanders, at the same time as improving value for money from more than $70 billion of public spending every year,” Mr English says. . .

A friend who worked in Wellington in the late 80s and early 90s saw the results of spending cuts. She was back there during Labour’s last few years in government and was horrified to see the increases in spending, including steep growth in public service employees, without commensurate improvements in services and results.

National had to change that but its restraint has been restrained rather than radical – focussing on protecting people from the worst impacts of the recession, reducing expenditure, improving efficiency and maintaining services.

The LabourGreen reaction to the Budget shows that they still don’t understand the necessity for such measures, they would undo the good National has done just as the 1999-2008 Labour-led government undid the good done by those which preceded it.

They spent up, they didn’t spend well and LabourGreen would follow that bad example.


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