KiwiBuild failed

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.

CK to save $billions

The government has a new strategy to save billions of dollars – relying on common knowledge (CK) instead of research and facts.

The seed for the initiative was planted by Energy Minister Megan Woods.

When asked about advice to back up her assertion that MBIE was wrong to say a ban on oil and gas exploration would have a negligible impact on domestic emissions and likely increase global emissions she said it was “very common knowledge” that was “widely held”.

“When the Prime Minsiter heard this she said a light went on and she immediately ordered a whole-of-government strategy to base all policy on CK,” spokesperson Bright Spark said.

”We’ll be able to ditch all the working groups for a start and that will save millions, but that’s only the beginning.

”With CK to guide us there will be no need for most of the roles at Treasury and the research positions in policy development at all the ministries and government departments will go too.

”We’ll be able to get rid of all the research bodies and a lot of the work of universities will become redundant.

”We won’t need robust data and scientific methods if we’ve got CK, especially if it’s widely held.

MS Spark said she didn’t have exact figures for the savings, but based on CK, she could confidently say they would soon amount to billions.

When asked about National’s Energy and Resources spokesperson Jonathan Young‘s assertion that Woods had failed to defend the indefensible, Ms Spark said it was common knowledge that this was merely an opposition tactic to discredit assertions based on facts.

”With CK, facts are an outmoded, and expensive concept. We won’t be taking any notice of them.”

Ms Spark said the government was working on an even more radical suggestion to base all policy on common sense (CS) as well as, or instead of, CK.

”But we’re having difficulty finding any. It’s a pretty rare commodity around here and we’re not sure there will be enough to make it work.”

 

 

Rural round-up

Fonterra is in a fix but farmers should beware of what happens when the Govt steps in … – Point of Order:

“Govt won’t fix Fonterra’s problems” – so ran  the  strapline  on  the  NZ Herald’s  weekly  “The Business”  last  Friday.

And  thousands   of  Fonterra’s  farmer-suppliers,  reading  the  article which quoted Agriculture Minister Damien  O’Connor,  almost  certainly would have sighed  with relief.

Who  would want   this   government  to  “fix”  their  industry?  Look what happened to  the   oil and  gas  exploration industry  after  Energy Resources  Minister   Megan Woods  applied  her  “fix”  to  it. . . 

NZ plays down threat to European agri interests in FTA talks – Paul McBeth:

(BusinessDesk) – New Zealand trade negotiators are trying to get their European counterparts to recognise that the nation’s agricultural exports are small-fry in comparison to the regional bloc’s farming sector.

The second round of free trade negotiations between New Zealand and the EU is underway in Wellington, with 31 European officials in the capital to make progress in a deal politicians say they’re keen to fast-track. In a 90-minute public forum, the chief negotiators – Peter Berz for the EU and Martin Harvey of the Ministry of Foreign Affairs and Trade – said there was a lot of commonality between the parties, but that agriculture is a sticking point.  . .

Breakthrough technology could save dairy industry millions:

A new device that detects processing losses in dairy plants could save the industry millions of dollars a year and help prevent pollutants from entering waterways.

Lincoln University-owned research and development company, Lincoln Agritech Ltd, developed the breakthrough technology and it was then commercialised by Christchurch-based start-up company, CertusBio.

The result is a robust, automated biosensor capable of continuous monitoring in commercial operating conditions. Known as Milk-Guard, the device uses a lactose-specific enzyme to measure the percentage of dairy products present in waste streams and processing lines.. .

12 lessons from the Future of Farming Dialogue – Jamie Mackay:

What’s in store for the rural sector? Host of The Country radio show Jamie Mackay got a glimpse at the Bayer Future of Farming Dialogue conference in Düsseldorf and Amsterdam. Here’s what he discovered:

1)

Even though it was very much tempered by sitting much closer to the front than the back, 17 hours is a hell of a long time to be stuck on a plane.

The Auckland-Dubai direct flight is the third-longest commercial flight on the planet, behind Auckland-Doha and Perth-London.

2)

The world faces a food crisis. How to feed a potential population of 10 billion people by 2050? In 1960 we had more than one acre (0.4 ha) of arable land for every person on the planet. Today that number is less than half that. Many of our most productive soils now grow only houses. . . 

 

Marking nests so we dont run over them with motorbikes or tractors. This oyster catcher has hers on the fence line in gate way right where we drive. Protecting the future bird life. pic.twitter.com/qgH8nJZ3gS

— Anieka Venekamp (@AniekaNick) October 7, 2018

Multi-pronged approach critical to successful environment strategy – Allan Barber:

Since announcing its environment strategy in May, the Beef + Lamb New Zealand team responsible for developing the plans, processes and tools to help farmers achieve the ambitious goals of being carbon neutral by 2050 and every farm having an active farm plan by 2021 has been working flat out to get the right farm planning systems in place. The strategy identifies four areas of focus – cleaner water, carbon neutrality, thriving biodiversity and healthy productive soils – with their own specific goals and a detailed implementation plan, supported by a series of what are termed ‘foundations’.

Initially there are two foundations which explicitly rely on the participation of individual farmers. The first is helping farmers navigate the myriad of farm environment plans out there so they can identify the one that complies with local regulations and is best suited to help them document their individual on farm environment plan; the second foundation will encourage the establishment and facilitation of catchment communities which are relevant to the farmers’ local areas.  . . 

CP Wool announces exclusive partnership to distribute NZ wool carpets in US:

Premium New Zealand wool carpets and rugs will soon be available to thousands more US consumers under a new distribution partnership between Carrfields Primary Wool (CP Wool) and J Mish Mills.

Under the agreement, leading carpet business J Mish will design and manufacture carpets and rugs from yarn grown and spun in New Zealand. The products will then be distributed throughout the US via J Mish’s large network of dealer and designer relationships. . . 

Feral sheep’s wool could set world record –

A feral ewe captured on a remote bluff will have her first brush with the shears this weekend and organisers say she could have the longest wool in the world.

The crossbred sheep was caught in the Mapiu district, south of Te Kuiti, by Amie Ritchie and Carla Clark.

Named Suzy by her captors, the ewe is not believed to have been shorn before.  However, that will change at The Wool Shed, the national museum of sheep and shearing, in Masterton on Sunday. . . 

Why we need a real forestry strategy – Rod Oram:

We’re an odd country when it comes to trees. We have a lot of them but no overarching long-term policy for them. Consequently, our short-term forestry decisions deliver some adverse outcomes, both economic and environmental.

And on our current course it’s going to get worse. We’re racing to plant one billion trees in a decade to help us meet our climate commitments (as last week’s column discussed), develop regional economies, reduce soil erosion, improve water quality, and enhance biodiversity such as helping to save native birds from extinction.

Trees could do all of that for us. But only if they can flourish in healthy ecosystems. To do so, they need all the help we can give them over three or four human generations. Instead, we’re working in silos over just a decade or two, the longest time most commercial enterprises can wait for an investment to pay off. . .

Major investors back medicinal cannabis with stake in Helius:

Cannabis-focused biotechnology company, Helius Therapeutics, announced today it has completed its $15m capital raise and is now backed by a small group of New Zealand investors, led by tech entrepreneur, Guy Haddleton.

Haddleton says “Helius Therapeutics has all the features we seek in a high-potential investment. The company has a clear and large vision, extraordinary talent and deep go-to-market experience. More importantly, Helius will improve significantly the quality of life for hundreds of thousands of New Zealanders”. . .

A wonky horned Highland cow on Highside with Pendle Hill in the distance pic.twitter.com/MkXu9V2DCI

— Hill Top Farm (@hilltopfarmgirl) October 6, 2018

PM there and here

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.

 

Unprepared, ill prepared

The ODT opines, there’s been a lack of progress from the government:

The Government seems intent on digging itself into a hole from which there may be no escape.

After nine years in Opposition, there were expectations change would happen quickly once New Zealand First went with Labour to form a coalition government, with support from the Greens.

However, that has not been the case. More than 100 working parties or inquiries have been established, some of them at least reporting back by the end of the year.

The latest one involves ‘‘fair pay agreements’’, seemingly code for collective bargaining agreements, to set industry standards.

Although the Government appears keen to talk to everyone possible about changes it wants to make, it seems Energy and Resources Minister Megan Woods did not bother to consult her colleagues when it came to deciding to stop offshore oil and gas permits being allocated in New Zealand.

When the papers were finally released this week, it was discovered the Government was warned its plans for future oil and gas exploration could have a chilling effect on investment.

The papers said if the supply of natural gas was restricted, the likely price rise for consumers posed a significant risk to the security of energy supply and could have a detrimental impact on some regional economies.

Wasting multi-millions on working groups then failing to consult on a policy with such significant ramifications as this is the sign of a government both unprepared and ill-prepared.

The Government is hamstringing itself. There is a chance, and a real one, the Government will achieve nothing before the 2020 election if it does not start making progress on some key policies.

The only policy it has made real progress on is fee-free education for tertiary students, most of whom don’t need it and which hasn’t resulted in an increase in students.

Even KiwiBuild seems out of reach for Housing Minister Phil Twyford. Branding private housing developments as KiwiBuild will not solve the problem of building 10,000 houses a year. Within a few months, the Government will have been in office for 12 months. Recriminations which are bubbling under the surface now will become fully-fledged attacks on the core competency of ministers who should have hit the ground running when it became their time to serve.

Prime Minister Jacinda Ardern can only hold the coalition together for so long if progress is not being made.

Planting one billion trees has not yet started, social policy is edging its way into the system, and the so-called housing crisis is not being addressed by Labour, which christened it such.

It is unrealistic to expect the Government to implement all its policies in the first 12 months, but some progress should be measurable by now. . .

What is measurable is a lack of business confidence, which is worsened by the prospect of a return to collective bargaining.

Employers say the fair pay agreements are a major cause of concern. BusinessNZ is part of the working group announced on Tuesday but employers say they are not supportive of a national award-type employment regime in New Zealand.

Under the proposal, employers and workers cannot negotiate their own conditions — unless they are above the fair pay rates. Although workers cannot strike for a fair pay agreement, they can strike to get their own rates above the fair pay agreement rate.

This is a return to the days of multi-employment contract agreements (Meca) which broke out separate pay agreements for workers living in high-cost areas, such as Auckland and Wellington.

This is a recipe for job insecurity, an increase in unemployment and business failure.

The craziness of continually forming working parties smacks of a Government ill-prepared to govern. Until Ms Ardern stepped into the position of leader, it did look as though National would win a fourth term. Perhaps Labour MPs had given up on the treasury benches and were going through the motions.

There’s no perhaps about that – they had and they were.

There have been missteps from some ministers, something not good enough from three-term MPs. The at-fault MPs are surely surviving because there is no-one with experience to replace them.

Labour, the major party of the coalition, needs to stop thinking about solutions and start enacting policies. Otherwise, a second term is starting to look out of reach.

Just eight months into government is very early to be talking about it being a one-termer.

But Labour, which spent most of its nine years in opposition wallowing directionless with most of its energy going on undermining its leaders, is unprepared and ill-prepared for government and it shows.

The fee-free policy is Labour’s, the other ones in which there has been any progress are New Zealand First’s money for good looking horses and the regional slush fund which Shane Jones admits is politically biased.

Shane Jones’ admission this morning that his Provincial Growth Fund is a political tool is backed up by new figures released this morning revealing Northland as the main recipient of taxpayers’ money, National’s Regional Economic Development spokesperson Paul Goldsmith says.

“The Provincial Growth Fund should really be renamed the Political Survival Fund after more than half the funding announced so far has gone to one region – one with less than 10 per cent of regional New Zealand’s population.

“MBIE information shows Northland has sought $54.6 million from the fund so far. Applications from all the other regions combined amounted to $240 million.

“Yet Northland projects have received funding up to $61 million – even more than they’ve asked for. While the rest of the regions have had to make do with $42.4 million combined, plus a $7.5 million grant to the Howard League covering the whole country, including Northland. . .

Northland’s got more than it asked for and the whole of the rest of the country has had to share two-thirds of that amount.

Yet even Northland hasn’t got what it really needs – a better road to and from the rest of the country.

Northlanders will be scratching their heads, wondering why some groups are getting all this attention, while the single most important investment for their region – the double lane highway from Wellsford to Whangarei has been scrapped in favour of Auckland’s light rail.

“Shanes Jones is being allowed to use public money for a thinly veiled political slush fund – but on the really big issues, such as advancing oil and gas production, there is no question that New Zealand First’s ‘provincial champion’ label is nothing more than wishful thinking.”

We need a government that’s prepared to govern for the whole country, not one whose major party is so ill-prepared it is mired in the quicksand of working groups and lets its minor partner get away with pork barrelling.

Doing something not doing good

The government isn’t alone in thinking it must do something, and it’s also not alone in thinking that something is  better than nothing.

But something isn’t better if it’s not doing good.

Take the government’s ban on oil and gas exploration that was done without a cost-benefit analysis, consultation and environmental assessment for example:

. . . “I am not aware of a cost-benefit analysis using the Treasury’s CBAx tool being undertaken in relation to the decision to grant no further offshore oil and gas exploration permits,” Megan Woods said. . . 

No formal consultation was undertaken with PEPANZ in relation to the decision to grant no further offshore oil and gas exploration permits. However, I have spoken publicly about the Government’s direction to transition away from fossil fuels and my office has had open dialogue with PEPANZ before this announcement.”

There’s also been no estimates on whether global greenhouse gas emissions will fall as a result of the decision.

“No specific estimate has been provided to me. I have been advised by officials that the effect on global emissions depends on the response of New Zealand’s large gas users.” . . 

The goal is to reduce carbon emissions but there is no plan for how that will be done.

Ending oil and gas exploration here will merely mean we are more reliant on imports and lose export income.

It’s putting the cart before the horse at Greg economic, environmental and social cost.

This is doing something  but it’s not doing good and not better than doing nothing.

This government has initiated more than 70 groups and committees to look at policy in its first six months. But as Rodney Hide points out that’s not all bad. At least while they are deliberating, the government isn’t doing something that will do no good or worse do bad.

That was then . . .

Remember how hard Labour and the Green Party campaigned against the then-National Government’s appointing commissioners to Environment Canterbury?

That was then, this is now:

National Party spokesperson for Greater Christchurch Regeneration has welcomed the decision by Local Government Minister Nanaia Mahuta to follow the previous National Governments’ approach to keep the current Environment Canterbury (ECan) board.

“Nanaia Mahuta is making a sensible decision to keep the current ECan Board and returning to a full democracy at the 2019 local body election, as the previous National Government had planned,” Ms Wagner says.

“Labour made plenty of noise about the lack of full democracy in Canterbury whilst in Opposition. Both present Ministers Eugenie Sage and Megan Woods led an aggressive campaign to have full elections immediately.

“Yet again, now that Labour is in Government it has abandoned its policy and is continuing with the plan started by National.

“Our long-term approach whilst in Government was designed to improve the standards at ECan. In 2009, the previous Government appointed commissioners to ECan following repeated poor performance by the council in achieving their regulatory requirements.

“Thanks to the hard work of the commissioners and the strong, sensible leadership of Dame Margaret Bazley and David Bedford, Canterbury now has one of the best performing regional councils in New Zealand.

“This has always been about making good decisions for Canterbury. The commissioners were put in to complete the water management plan for Canterbury which had languished under the leadership of the previous council.

“Nanaia Mahuta’s decision shows that the long-term plan started in 2009 has been effective. Half of the members on ECan were elected in 2016 and the plan had long been for the full council to be elected in 2019.”

ECan wasn’t working with elected councillors.

Commissioners have improved performance. Half the board are now elected members and as National planned, all members will be elected at the next local body elections next year.