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.