Monday, 12 December 2011

Labour leadership primary

I don't really mind who the next leader of the Labour Party is. Both Davids support a New Zealand republic. Whichever David prevails in caucus, they've certainly got their work cut out for them.

I've heard anecdotal evidence though that the leadership competition has re-energised Labour's membership after a debilitating defeat. Former members who had lost interest in the party have renewed their membership just to attend the series of forums the party has held.

In 1998 a group called the Campaign for Conservative Democracy, despite having an ugly website, succeeded in its campaign to enable "grassroots" to vote on who the UK Conservative Party's next leader should be where the party had more than one candidate for leadership.

The rules weren't enacted until the 2005 leadership contest which saw David Cameron elected as party leader. The campaign re-energised the Conservative party's membership. So, my modest proposal is that Labour amend its constitution so that the next leadership competition where there is more than one candidate, caucus should decide who the top two candidates are, with the final decision to be made by the party membership at large. The Conservatives used a postal vote system. It might sound ironic, but NZ Labour could do well to copy the UK Conservative's leadership rules.

Saturday, 10 December 2011

National and the MMP game

So, the final results are out on the MMP referendum - 57.77% of voters voted to keep and review MMP. As readers will know, I haven't been updating this blog because of the general election and referendum campaign. For the referendum my role was acting as the Auckland spokesperson for the Campaign for MMP, and helped out with the website and back-end database. I'll allow others to perform the post-mortems on the campaign for now, my interest at the moment is getting the centre-right to move on from dumping MMP and start thinking seriously about actually playing the game.

This referendum came about as a result of a series of policy discussions, originally lead by the Chris Finlayson (now Attorney-General), on constitutional issues for National to confront. Following National's horrendous 2002 defeat, three policies were entertained: referendums on a New Zealand republic and the electoral system, and abolition of the Maori seats. 

Needless to say, the referendum on the electoral system and abolition of the Maori seats went ahead as National policy into the 2005 and 2008 elections. The republic did not. I wasn't privy to the reasons why, being just a pimply Young Nat at the time, but my understanding was that there was a feeling that MMP was to blame for National's poor showing. Many believed NZ First and United Future expanded their vote at the expense of National, and were determined to win back that support. 

This showed a fundamental misunderstanding of the electoral system. It led to the referendum we've just had. It is an issue National must now confront unless - to borrow a phrase from the anti-MMP camp - it wants to become the "natural party of opposition". What do I mean by this?

Cathy Odgers, writing in the NBR on the Act Party's fortunes, put it this way:
Under MMP, even the most popular prime minister could only barely scrape a majority, which proves how hard it will be for the centre-right next time if we don’t work intelligently as a collective to structure coalition partners for National on a more coherent and friendly basis.
Cathy suggests National should do a deal with Colin Craig's Conservative Party (or CCCP for short). She's absolutely right - and they should be open and honest about it, as they should've been in Epsom with Act.

National has to play the MMP game much better. Not only that, it must play the game smarter than the opposition. National should agree now with Act that its electorate candidate in Epsom will not campaign for the electorate vote. The National candidate will be able to say so. To do so is not undemocratic, the people of Epsom who support a centre-right government will be able to vote for or against one. No need for cups of tea or wink wink nudge nudge-style politicking.

The underlying problem is, however, that Act is dead politically. John Banks will live on as the last vestige of a once important political party; he will become another Jim Anderton or Peter Dunne type figure. I wouldn't be surprised if he caucuses with the National Party.

Counting CCCP as a party of the centre-right, the overall party votes on the right of New Zealand politics was 51.63% in 2011. Now, I don't like Colin Craig's mix of social conservatism and autarkist economics. In many ways it's the opposite of what I stand for. Nor do I like his opportunist political carpet-bagging party, which seems to be little more than an amalgam of paleo-conservative Actoids, failed Christian politicians and a new immigrants party. But there's no denying the 2.66% of the vote his party received, on the strength of its nationwide campaign, was significant. And in a way it would be good for all the social conservatives to have their own party - especially since most social issues are matters of conscience.

Cathy suggests National should give CCCP a seat. Rodney is the most obvious candidate, since that's where Colin Craig is from. If this is to happen, I'd expect the same sort of open and honest approach I'm calling for in Epsom. But to me, this is just a short-term solution.

A much better strategy would be for National's strategists to work with Craig build a nationwide, grassroots campaign. The aim of this campaign would be to break the 5% threshold (heck, they could make it easier for themselves and lower the threshold to 4%), largely by taking votes off New Zealand First.

Joking aside, New Zealand First's base is largely made up of economic autarkists and assorted Muldoon fanboys (they're almost always boys). They are perfect candidates for voting CCCP. No doubt there will be shenanigans from NZ First members (this guy seems to be the prime candidate) which will damage its brand. But more importantly, so long as Winston Peters is around, John Key and National cannot work with him. That needs to be the message National continues to stress throughout this term.

Should CCCP take 2.4% of the vote off NZ First, Parliament will look very different; Peters would be out again and CCCP would be in. Even if National's vote drops in 2014 (and it almost certainly will following a difficult second-term) having a party to the right able to work with John Key will be the difference between holding or losing the treasury benches.

Monday, 28 November 2011

Back on the block

I'm back blogging, due to a self-imposed exile over the last part of the election and referendum campaigns I was involved with.

There will be posts on both those campaigns later, but for now there's a backlog of things that have backed up over the last few months to get through. First up, spend time with the wife...

Tuesday, 13 September 2011

RWC opening ceremony: whingers and colonial cringers

As expected, someone (John Galvin of Hamilton, city of the future) is having a whinge about the Rugby World Cup opening ceremony in today's New Zealand Herald:
"I was very disappointed with the opening ceremony. Not with its presentation, which was technologically brilliant, but with the content. Any overseas observer, whose knowlege of our history was limited, could be forgiven for thinking it and our heritage was predominantly Polynesian"
This is sadly typical colonial cringe spewed forth in certain quarters of New Zealand society. Looking at the opening ceremony footage, it's pretty clear to any overseas observer that New Zealand's heritage is European and Polynesian. For example:
  • The Orchestra - clearly European;
  • The bagpipes at the Auckland War Memorial Museum (a neo-classical design);
  • And, of course, the rugby itself, a European sport.
I suspect Mr Galvin is so blinded by his colonial cringe at the demonstration of the fact that New Zealand has Polynesian heritage to actually notice the European parts. That's usually the case with whingers of course.

Saturday, 27 August 2011

Oh noes! Maori might buy into SOEs!

Alf Grumble, allegedly a satirical blog, complains bitterly that floating state assets might just mean that Maori are able to buy into them. Radio New Zealand reported earlier this week that a pan-tribal group, the Iwi Chairs Forum, has decided to pool their resources to buy shares in Air NZ and the power companies which National plans to float following the election.

According to Alf, this is a bad thing - largely due to the involvement of Tukurangi Morgan. Morgan famously purchased $89 underwear with money from the Aotearoa Television network. Apparently this makes him incapable of running any business, ever. I for one can't see what the problem is with Maori owning these SOEs.

Sunday, 21 August 2011

Thursday, 14 July 2011

Capital Gains

Labour has finally announced its capital gain tax, after slowly leaking the details to TV3 to maximise publicity. The guts of it are:
  • a 15% Capital Gains Tax on property, shares with exemptions for the "family home" and houses in the CERA zone;
  • Increasing the top income tax rate to 39% for every dollar earned over $150k;
  • Introducing a 0% income tax rate for every dollar earned up to $5k (aka a tax-free threshold);
  • taking GST off "fresh fruit and vegetables".
Labour claims their policies will result in a shift of investment in unproductive speculative parts of the economy (i.e. real estate) to productive parts of the economy. Personally, I believe some form of CGT (or perhaps land tax) is inevitable in New Zealand. Considering the OECD and IMF have both pointed capital gains is a major gaping hole in our tax system, it seems difficult for anyone to argue against it. But as the tax working group has pointed out, CGT has still got to collaborated correctly and done for the right reason. The right reason is to rebalance the economy. I'm not convinced Labour's policies will do that.

As Bill English points out, the proposals are really about paying for Labour's spending plans. But if Goff really wanted to encourage investment in productive parts of the economy, then he wouldn't increase income taxes for those most likely to invest, or include shares in a CGT.

In short, the move to CGT should be revenue neutral to encourage a shift in investment from property to productive investment. Implementing CGT won't be easy, and as the Australian experience shows, a partial CGT could distort the economy further. 

As for the other parts of Labour's package today, I am a fan of a tax-free threshold (i.e. a 0% tax rate). However, Labour knows that doing so benefits the wealthy - because under our progressive tax system, the wealthy pay proportionately the most income tax. A $5,000 threshold seems far too measly. My preference would be for a threshold three-times that amount, around $15,000. This would mean that many beneficiaries won't be taxed, and keep every dollar they earn. However, this policy would mean having to cut spending in other areas.

GST off fresh fruit and vegetables is nothing more than a token tax policy. It's doubtful that decreasing the price of a banana from 57c to 49c is going to increase its consumption greatly. In fact it's symbolic of the proposed changes that Labour chose to make this added complexity to GST a leading policy.

Saturday, 14 May 2011

"Both of us have nowhere else to go."

Chris Trotter talks sense when it comes to the Treaty debate. He gets to what I think the heart of his criticism of identity politics actually is. The quote above stood out for me for two reasons - because I fundamentally agree with it, and because I also think looking at the numbers its clear that Maori do have "somewhere to go" - Australia. With an ex-pat population of over 110,000 in Australia, the proportion of Maori amongst New Zealand ex-pats in Australia is greater than in New Zealand itself (the total is 500,000, meaning Maori make up 22%), it's clear that Maori are leaving New Zealand in greater numbers than non-Maori.

The question is why - better economic opportunities seems to be the obvious answer, but why would Maori leave New Zealand at any greater speed than the rest of us?

Thursday, 17 March 2011

Te Borg

As Craig Ranapia once said, Maori and Maori opinion aren't The Borg (I think he dubbed it "Te Borg"), and despite what the mainstream media often portrays, do not think act and feel all the same way. It seems that a large number of New Zealanders seem to believe that Te Borg exists, and is after their foreshore and seabed.

Sadly, it seems some Maori seem to believe this also. Luckily it looks like they're in for a rude shock come November 26. I predict more protests at Waitangi Day 2012.

Wednesday, 16 March 2011

Productivity up - due to unemployment?

Productivity is up 3.7% for the 2009 - 2010 year. This compares with an average of 0.9% growth from 2006 - 2009. It's the highest it's been in 10 years.

The Standard says this is because unemployment's up. If that was the case, you'd expect there to be stronger correlation between poor productivity performance and low unemployment. As you can see from the graph above, unemployment has shot up following the global financial crisis in 2008.


Not just an earthquake, but a tsunami followed by what looks like the worst nuclear disaster in 25 years.

My friend JJ, who lived in Japan for a year as an English teacher, has an excellent article on the tragedy.

As for the nuclear issue, sadly the usual hysterics have come out, arguing that this is incontrovertible proof that nuclear energy is evil. I remain unconvinced - specifically that nuclear energy is itself evil; for New Zealand the economics simply don't stack up. The Japanese situation is totally unique, and it's questionable whether planners could've conceivably thought of the earthquake plus tsunami combo.

The real problem with nuclear energy is not the operation of plants - it's the nuclear waste they generate, and storing it for thousands of years after it's been used. The idea of nuclear energy being clean and green is, for this reason, nonsense. That said, while nuclear plants are in operation they produce substantially less carbon emissions.

Monday, 7 March 2011


It's been sadly fascinating to see the snipes and counter-snipes across the political divide following the Christchurch earthquake. If there's any sign of life returning to normal, it's the positions taken by both sides. Predictably, the left either want higher or special taxes to pay for the rebuilding, while many on the right want spending cuts and tax cuts to increase growth. Oh well. Thankfully we now have a service to look forward to on March 13th.

Good on Peter Dunne for making Wellington City Council release its list of "quake-risk" buildings. There's also a "quake-list" map knocking about. Kapiti, Porirua and the two Hutts should follow suit.

What impact will it have on the general election? My prediction is that the Government will move more to the right at the election; its privatisation program will be more generally accepted and there will be spending cuts; probably only to Working For Families though.

Tuesday, 22 February 2011

The Genie is out of the bottle - but will it grant the people's wishes?

David Shearer writes over at Red Alert that the "Genie" is out of the bottle in the middle east. He points to a lethal cocktail of youth, unemployment, global connectivity and above all fearlessness on the protesters' part. The question now is what Genie has been released - the Genie of democracy and economic and political freedom? This was the case in Eastern Europe and most of the former Soviet Union following the revolutions of the late 80s and early 90s. Or is it the Genie of Islamic extremism, and deeper authoritarianism as was the case in Afghanistan in the 90s, Iran in the late 70s and Libya in the late 60s? Only time will tell.

Sadly the latter examples reflect political realities in the middle east - particularly when it comes to Iran's revolution. The Iranians threw off their repressive western-backed monarchy only to have the revolution hijacked by Islamists. Iran is now a repressive theocratic state. Libya is another kettle of fish; the it appears to be a revolution in parallel to Romania, with Gaddafi's exit strategy appearing to mirror Ceau┼čescu.

It's my hope that Egypt will lead the middle east peacefully towards liberal democracy. However, with the military in charge that's not likely - perhaps the best we can hope for is a Turkish-style compromise, where the military is the bastion of defending the secular state, keeping (largely) the sectarian parties in check.

Sunday, 20 February 2011

The polls - February

Well, I'm very surprised. After TV3's poll earlier this week showing 60% of New Zealanders were opposed to "privatisation" versus 30% in favour, you would think the government was up for a big hit in the polls. Apparently not - TV3's poll shows National still with a comfortable lead. I really expected John Key to take a hit on privatisation - but the One News poll shows a marginal 4% drop.

This will change though. November 26 is 9 months away, and a lot can happen in 9 months. The biggest threat to John Key's position comes from NZ First, who he has ruled out including in government. You'd expect that anti-privatisation National voters would flock to NZ First, but that doesn't seem to be the case; just 3.6% of respondents in One News' poll said they would vote for them.

Thursday, 17 February 2011

40% referendum threshold

In the UK, Conservative peers have pushed the government to accept a 40% turn-out threshold for the forthcoming referendum on electoral reform in the UK. This isn't a bad idea, as constitutional change requires legitimacy. Even with just a 40% turn out, a majority equates to 20% of the total population - meaning 20% is determining constitutional change for 100% of the population. That's hardly democratic.

Family First's misleading "survey"

I don't usually agree with Brian Edwards, but he's on the mark with this one. Of the misleading questions in this survey, the one that got me was:
16.   (Stem Cell Research) New Zealand should promote adult stem cell research, and oppose embryonic stem cell research.
I responded "neutral" because stem cell research can't really be divided between "adult" and "embryonic", at least if you want useful results from it. On the other hand, I didn't want to say I strongly disagree with the proposition, because that looks like I disagree with any stem cell research, adult or embryonic. Saying I agree with the proposition would mean cutting off embryonic stem cell research and forcing scientists (in New Zealand, I assume) to focus on "adult" stem cell research.


Sorry for the hiatus, I've been off getting myself married. Still on leave this week seeing off family who came over for the wedding.

Wednesday, 2 February 2011

Good onya Prime Minister - now for fixed election dates

Another coalition with National?
Prime Minister John Key announced today that the general election will be held on Saturday 26 November 2011. It's great to see the Prime Minister announcing the date in February. By doing so he has prevented speculation about the election date (which we had to put up with three times under the last government) especially during the Rugby World Cup.

Equally pleasing is the decision to rule out any agreement with Winston Peters. Firstly because it means anyone voting New Zealand First will be voting for a coalition with Labour (I don't think NZ First voters actually want that - they want to "moderate" National). Secondly, because that has essentially kills New Zealand Firsts chances of getting back into parliament, save for an anchor seat.

That aside, if the Prime Minister really wants to prevent silly games with the election date, he should amend the Constitution Act to fix the date. Using the formula the Local Government Electoral Act 2001 implemented, the term of parliament (and therefore the election date) can be fixed on one day:
xx. Triennial general election
  • (1) The next triennial general election of members of parliament is on 26 November 2011. 
    (2) A general election of members of parliament must be held on the last Saturday in November in every third year after the general election referred to in subsection (1).
There. Done.

Monday, 31 January 2011

In the shadows of think big

The New Zealand Herald business section has an interesting article on "Think Big", the cornerstone economic development policy of Sir Robert Muldoon. Honestly, I don't know why the media goes on about Think Big so much. By far Muldoon's worst policies were National Superannuation, and trying regulate inflation out of existence. Think Big has been fairly beneficial, it seems.

Interestingly, Bill Birch chimes in with a point I'd not considered before:
...a more fundamental concern was a "take or pay" agreement for Maui gas with Shell, BP and Todd.

Under the agreement, if the Government, which was a half owner of the gas discovery, did not buy specified quantities of gas it reverted to the ownership of the companies and so the value would be lost.

So, the Government was snookered by its own agreement into doing something with all that gas. And it seems a lot of good came from Think Big: 
  • The Official Information Act 1981 (albeit largely because the Government wasn't being honest about the Clyde Dam);
  • A whole lot of industrial infrastructure that continues to provide jobs and exports;
  • Greater technical capability in the engineering industry, which had its own flow-own affects into the private sector.
On the downside, there's clearly the huge cost of the projects, leading to the debt the Government took on its book. $7 billion in total, according to the article.

But as I've said before, that pales into comparison with the ongoing cost of National Superannuation.

Partial privatisation: serving two masters

Anti-Dismal makes a point missed so far by almost every commentator:
With partial private ownership of an SOE you run into the "a man can not serve two masters" problem. The aims of the private owners and the government are unlikely to be the same. Private investors will want to maximise profits while the government may well have political objectives it wants met. A firm can not do both and if it were to try it would just fail to achieve either.
I suspect this is, however, a reason why the left opposes partial privatisation. It means that, unlike Michael Cullen's years as minister of finance, the government won't be able to use the power companies as a proxy tax by demanding higher and higher dividends.

More importantly, as I've pointed out here a number of times, listing the SOEs opens them up to the rules that apply to publicly listed companies. That is a very good thing.

Wednesday, 26 January 2011

Thursday, 13 January 2011

Letters to the editor, ridicolous analogy edition

Here's a corker of a letter to the editor, from The Dominion Post:
Justice Minister Simon Power is refusing to assist the granting of compensation to David Bain (Editorial, Jan 4).

This from a Government that's throwing millions of our dollars to settle Treaty claims.
Where to start? Well, firstly, the Minister hasn't "refused" to assist giving David Bain taxpayer's money. He just said Bain would have to follow the normal process like, um, everyone else found not guilty of a crime. Bain's lawyer, Michael Reed QC, a man I will not express my personal opinions on lest I end up being sued for telling the truth, tried to short-circuit the process by seeking direct negotiations with the minister.

Secondly, you just can't compare the potential compensation for someone found not guilty of a crime versus 100 year plus old grievances over land confiscation and violence at the hands of state agents.

Monday, 10 January 2011

Hilarity from Andrew Geddis

From Pundit:
Phil Goff (Prime Minister) (Sitting astride a Harley-Davidson whilst dressed in a leather jacket, motorcycle helmet and red-top gumboots, with a lamb carelessly tossed across his shoulder): If we could come to order, please. I think we might begin proceedings with a motion of thanks to the man who has made this day possible.
David Cunliffe (Deputy PM, Minister of Finance and Thwarted Ambitions): You mean John Pagani, whose behind-the-scenes, masterful reworking of your image proved so pivotal in helping ordinary kiwis accept you as one of them?
PG: Don't be silly, Geoffrey. I'm talking about Dan Carter ... more particularly, Dan Carter's left achilles tendon.

Tuesday, 4 January 2011

That article thingee

Here it is...

Some time this month the Prime Minister will announce who New Zealand's next Governor-General will be. While they represent the Queen in London, constitutionally the Governor-General is the highest office a New Zealander can aspire to.

The appointment is entirely the choice of the Prime Minister of the day. The Queen merely rubber-stamps the appointment.

The new Governor-General will take office in August for five years. He or she will receive a salary of around $180,000, live in two palatial mansions in Wellington and Auckland, be driven around in late-model Jaguars and have a host of other privileges. For the first time, though, he or she will have to pay income tax like the rest of us.

After the infamous comments by TVNZ's Paul Henry last year, it is likely the appointee will be someone who "looks and sounds like" a New Zealander.

In fact, since 1967 we have had someone who looks and sounds like us in the role, including two women (Dames Tizard and Cartwright) and New Zealanders of Maori (Sir Paul Reeves) and most recently Indo-Fijian ancestry.

Yet no New Zealander can aspire to being our head of state - that position is reserved for a family in the United Kingdom. However, we recognise that we have to start somewhere. The Governor-General's office is an obvious candidate for reform.

The Republican Movement believes nominations for the job ought to be made by the general public, instead of the Prime Minister's office sounding potential nominees.

The public's nominee should be subject to approval of three-quarters of MPs and a majority of party leaders in the House of Representatives. It should not be up to the Prime Minister to appoint the officer able to dismiss his or her government from office.

The Government has already passed legislation to ensure members of the Electoral Commission are appointed by a resolution of the House of Representatives following nominations to a committee of Parliament.

Similarly, Ombudsmen and the Auditor-General are appointed by the House. Members of the Electoral Commission are nominated to the House by a special committee of Parliament.

There is no reason why the Governor-General should not be nominated to the Queen in a similar way, albeit with additional requirements to ensure the appointee is neutral, and acceptable to all sides of politics. That is why we propose a "super-super majority".

In the Pacific, Papua New Guinea and the Solomon Islands elect their Governors-General. This is a consequence of both countries gaining independence about the same time in the 1970s.

Since 2007, Samoa has elected its head of state. The first such election took place in 2007, after the death of the last Malietoa who was a king-like figure under the 1962 independence constitution - written by New Zealand legal experts.

Elsewhere within the Commonwealth the republics of India, Malta and Trinidad and Tobago elect their presidencies via parliament with no problems.

This change would be a first step towards reforming the Governor-General's office into a full head of state. Dr Michael Cullen recently proposed such a change in his paper to the Reconstituting the Constitution conference.

Dr Cullen proposes that following the end of the Queen's reign a referendum is held to either make the Governor-General New Zealand's head of state, or for Prince Charles to carry on as our "Sovereign" in London.

In any event, Dr Cullen - a self-described "token-monarchist" - believed that Parliament should debate the appointment by way of a parliamentary order. This does not require legislation, although Victoria University constitutional lawyer Dean Knight, who also spoke at the conference, has prepared a potential members' Bill to amend the Governor-General Act.

There is much secrecy around the appointment process. The Republican Movement has made numerous Official Information Act requests to the Prime Minister's office to clarify the process and framework for the nomination process. All they have confirmed is that the appointment is made in secrecy.

The Prime Minister's office advises the Prime Minister on the framework for appointment, but the exact details of this advice remain shrouded in the official secrecy that surrounds the monarchy.

The changes we propose will clarify the vague and undefined conventions around the appointment and dismissal of the Governor-General. It is often claimed the Prime Minister must consult with the Leader of the Opposition, but this appears to have rarely been the case.

In 1977, when former Prime Minister Sir Keith Holyoake was elevated to the position, then leader of the Opposition Bill Rowling learnt of the Prime Minister's choice by a radio announcement.

If the House of Representatives debate the nominees it will further our constitutional evolution. It could be the first step to a New Zealand republic with an independent head of state.

* Lewis Holden is chairman of the Republican Movement.
By Lewis Holden

We're no. #1...hundred and two

According to the CIA, New Zealand is no.102 in the world for the cumulative total of all government borrowings less repayments that are denominated in a country's home currency." We're sitting on 22%.

However, as the CIA cautions "Public debt should not be confused with external debt, which reflects the foreign currency liabilities of both the private and public sector and must be financed out of foreign exchange earnings."

Our problem, since the big debt-pay down during the 80s, is private debt. Unfortunately too many people confuse the two - and the current account deficit (which has two components to it - the balance of trade and balance of invisibles). I'm always sceptical whenever someone starts talking about the "national deficit". It could mean anything.