Kiwiblog

Colin James has beaten me to the punch, on the issue of National’s one page policy papers:

So in behind the bland one-pagers lies quite a lot of study, consultation with outsiders and internal shadow cabinet debate. A 34-page paper backed the workplace relations one-pager. Law and order policy was well footnoted.

That applies in all major policy areas. In some, such as education, welfare and the environment, the background papers have been reworked over some years. Immigration and local government papers have been honed down. In some, as in housing, science and in a complex set of policies on infrastructure, some work remains to be done. In some, the background is essentially a statement of principles.

In 2006 Key, freshly leader, backed an English programme to publish discussion papers, to be refined into policy after feedback (much as Kevin Rudd did in Australia). But only a handful emerged before the health paper’s bungled release last September abruptly ended the process. Now some policy is being released without the supporting papers. Outsiders have to take on trust that the policy is based on solid thinking. Key read out to me the workplace relations paper’s headings but I have not seen it.

Having previously worked in Parliament, I was pretty certain that there was a lot of work and detail behind the one page policy summaries, and Colin has confirmed this is the case – which is good.

99% of NZers are not interested in the details. In fact they won’t even remember too much from the one pagers – the average voter will have a vague idea of half a dozen key policy pledges probably.

But the 1% do not want the detail behind them. The 34 page backgrounder on workplace relations for example probably has some great details on how the 90 day trial period works overseas, the issues around the Holidays Act etc. Releasing the background paper doesn’t detract from the one page summary – it complements it. It demonstrates the work done by Spokespersons and staff over the last two years.

Yes, Mallard will jump up and down over a minor detail on page 27 and scare monger about it. But Trevor will scare monger on the smell of an oily rag. Don’t let the fear of scare mongering detract from showing to pundits and the public that the policies National is campaigning on are based on extensive research.

So can we have the full policy background papers please. If you don’t want to release them on the day of the main policy that is fine, but can we have them at some stage.

The Press reports:

Rather than answer questions about the Spencer Trust however, Peters is expected to highlight large corporate and personal donations to the National Party’s Waitemata Trust and to “name names” under Parliamentary privilege.

This is to be expected. I doubt Peters has any knowledge of donors to the Waitemata Trust, and suspect he will just name all the businesses and businesspeople he doesn’t like.

Peters fails to understand there is a difference between him making an allegation under parliamentary privilege, and the media reporting on documents which prove donations (such as the Glenn e-mail and the Vela cheque) and of course direct testimony from donors such as Sir Robert Jones.

The other issue of course is that the Waitemata Trust’s donations to National have been declared every year on their donations return.

Now don’t get me wrong. I am a supporter of closing down trusts as a way to hide identity of donors. My submission on the EFA said as much. I think anyone who gives over $10,000 a year should be disclosed (note the EFA allows up to $46,000 in one year without disclosing identity).

But if Winston thinks his issues will go away, by making some allegations under parliamentary privilege, he may be surprised.

National has announced two of its list only candidates. They are Steven Joyce and Melissa Lee.

Steven will be a very popular choice – he played a key role in the 2005 campaign which lifted National’s vote by 18% or so, and is an incredibly capable and talented individual.  He is also the Chair of the 2008 Campaign Committee so this gives him an incentive to get a really good result!

Melissa Lee is a member of the APN Board of Directors. And no before the conspiracy theorists get excited, that is not APN Media but the Asia-Pacific Producers Network.  Ms Lee is the host of Asia Downunder and has 20 years of broadcastign and journalism experience.

Steven also has a background with broadcasting – In the late 80s he co-founded and then became CEO of what is now Radioworks NZ Limited, building it up over 14 years to a sharemarket capitalization in excess of $100 million.

Two editorials saying it is time for proper answers from New Zealand First. First The Press:

… in the present row, Peters’ reputation is being severely eroded by his refusal to give a clear and full account of the large sums paid to his party.

The circumstances of those transfers are so suspicious and the issues so significant that few people other than his most one-eyed followers would doubt that an explanation is needed. Without it, the impression is left that an important party and a main participant in the Government has been the beneficiary of secret payments, large in amount and made for unknown reasons and with unknown consequences.

We don’t even know what the Spencer Trust spends it money on. At least with the Waitemata Trust there is a clear paper trail that it makes donations to National and discloses them. There are no donors to the Waitemata Trust saying “Hey we though this money would get passed on and it wasn’t”.

Doing that will depend on Peters addressing fundamental issues: how much has been paid by various donors and which entities associated with the party have received it; who were the donors; to what purpose has the money been put; have the donations and their dispersal been legal?

It is probably unrealistic to expect the identity of donors to the Spencer Trust to be disclosed, but someone has to front up on why Winston and his personal staff were soliciting money for it, and how has that money been used.

Events, though, may be conspiring to derail his plans. The sense is that more disclosures will be made and the survival of the Government has been brought into play. That latter issue means the Prime Minister is a participant in the business, and she has it in her power to be decisive in deciding its outcome.

Helen Clark has managed to distance her party from the row, but the longer it continues, the more likely is Labour to be damaged. New Zealand First is a main coalition partner a connection that risks guilt by association in a nation already suspicious of Labour’s conduct of electoral matters.

Labour often attacks National on its former secret trusts. It will never be taken seriously on such issues again if it continues to sit there saying it has no issues with the NZ First arrangements which are far far less transparent.

And the Dom Post:

The labyrinthine funding affairs of NZ First need to be publicly unwound, The Dominion Post writes.

NZ First leader Winston Peters has campaigned long and hard against secret trusts and the role of big business in funding political parties, and for transparency. Now, when it is his own behaviour that is being questioned, he favours stonewall and bluster, rather than revelation and explanation.

And the notion that he knows nothing at all about a trust he solicits money for, named after his namesake, his staff collect money for, and his brother runs is insulting our intelligence

Mr Peters has, in the past, called for an investigation of a trust that gave the National Party $50,000, railed against the non-disclosure of donations and proposed legislation requiring that all donations above $500 should be disclosed.

As recently as last year he fulminated against the role of covert money in politics.

And it appears no party has more covert money than NZ First – in two weeks we have learnt of two secret trusts or funding sources which benefit either Peters personally or his party.

It also means doing more than simply calling the claims “unsubstantiated rubbish,” offering the view that Sir Robert’s memory is failing and protesting that he has no involvement with the Spencer Trust. These are serious issues that deserve a serious response, rather than the aggressively delivered but content-free dismissals that have been offered so far.

The people who should have the most pressing questions are in fact the NZ First Board and Caucus. It appears none of them had any knowledge of the Spencer Trust despite the fact the Leader’s staff was collecting money for it, and donors to it think by donating to it they are supporting NZ First.

Surely at least one of them is concerned enough about their own integrity and credibility that they want a decent explanation? Are they not concerned that possibly hundreds of thousands of dollars has gone into a private fund they know nothing about, and not under the party’s control? What if Peters died suddenly? Would any money in the Spencer Trust go to the party or go elsewhere?

Mr Peters argues that none of the claims made so far contain evidence that NZ First has acted outside the law, but he, more than any other politician, should know this issue is not just about the letter of the law.

It is also about whether a party with a leader who last year warned a Nelson audience of the dangers of “huge funds of secret money seeking to distort our democracy” and argued for “transparency and spending limits” on political spending is prepared to back its rhetoric with its actions. Unfortunately, Mr Peters so far has shown little sign of doing that. Instead his actions suggest he regards transparency as a virtue best practised by others.

Indeed do as I say, not as I do.

Nor can Prime Minister Helen Clark continue to treat the issue as one solely for NZ First. She must accept that Mr Peters is a minister in her administration, as well as the leader of a rival political party, and that it is not possible to fully separate the two roles. The questioning Mr Peters deservedly faced over the funding issues as he held a press conference with United States Secretary of State Condoleezza Rice simply underlines that.

Her message to him today must be explicit: if you wish to continue as a minister, clear this up honestly, openly and quickly.

If Clark allows this to just carry on and on, them more fool her.

Michael Littlewood has kindly e-mailed me a response to my comments on KiwiSaver. Michael is an expert on superannuation policy and is co-director of the retirement policy and research centre at Auckland University. He has been on almost every expert taskforce there has been on superannuation.

DF:And this law change will make it illegal to pay them more money if they do not go into KiwiSaver.

ML:I think the argument is rather to give KiwiSaver members smaller future pay increases to allow for the cost to the employer of KiwiSaver. The outcome may be the same but there is a different emphasis.

DF: So this is the head of the Unite union agreeing the the EMA Northern that the scheme dsicriminates agaianst the poor, young and old!

ML: McCarten is not completely accurate. The young do get the kick start and also the favourable tax treatment afforded by the PIE tax status of most schemes. However, they don’t get the member tax credit and the employer isn’t obliged to contribute. For the old, yes the employer doesn’t have to pay but the member tax credit continues for some (those who haven’t completed five years). However, all of this wouldn’t matter if the employer could pay members and non-members for the job they are doing, not based on whether employees joined KiwiSaver or not.

DF: Exactly. The overall costs to the employer should be the same.

ML: Non-members (who as McCarten and Thompson acknowledge will tend to be the young and the poor) will miss out in three potential ways – first, there is the direct difference in total remuneration that is the subject of this blog. Secondly, employers that are forced to pay more to members will compensate with lower future pay rises to all. That means both members and non-members will all get less but members will have the compensation of the employer’s contributions and the tax breaks that non-members won’t get. Thirdly, the non-members will, along with everyone else, be paying higher taxes to pay for the cost of KiwiSaver but won’t be getting their share of the taxpayers’ handouts.

DF: It is becoming close to de facto compulsory and I suspect it will become compulsory at some stage.

ML: But compulsion doesn’t magically make things “fair”. If young, poor employees can’t afford the 48 cents an hour now, how does forcing them to pay the 48 cents an hour suddenly make it affordable? It may remove some of the current inequity only because there will be no difference between different groups of employees. And then what about the other unfairnesses of a compulsory KiwiSaver? Will non-employees be forced to pay as well? (Not many countries with compulsion do that for good reasons). If not, their taxes will be higher to pay for the employees’ KiwiSaver. Then there will be the inequity between the old (whose taxes will be higher to pay for KiwiSaver) and younger taxpayers. And what about children who can join KiwiSaver now? (Why that should be so is probably best explained as a legislative accident).

DF: I support KiwiSaver partly because it is an effective privatisation.

ML: But only if you accept that KiwiSaver leads inevitably to an Australian style income/asset test on New Zealand Superannuation. If you really want to know why that’s a bad idea, you need to understand how the Australian system works and why it is that the incomes of most Australian financial planners are dependent, in part, on developing ways to avoid both tests.]

DF: And McCarten is right that it will inevitably lead to a move away from the current universal publicly funded superannuation scheme. A 25 year old today will earn more money in retirement from KiwiSaver and NZ Super than they will during their working life. That is nuts, and inevitably public superannuation will be made less generous as more and more people have KiwiSaver.

ML: think the more likely outcome will be a scaling back of the KiwiSaver incentives. We don’t yet know what National really thinks of KiwiSaver II. If the long term policy drift is back down towards a KiwiSaver I, the alarm about the impact on the future New Zealand Superannuation benefit might be lessened. However, I agree that future governments cannot really sustain both in their present shape.]

DF: Indeed. Employers should be able to offer a total remuneraton package where if an employees chooses not to go into KiwiSaver, the employer can pay them extra cash.

ML: The shame of it all is that, before KiwiSaver I or II, the best evidence we have is that most New Zealanders were saving enough for retirement – see here, here, here and here for examples. My fondest hope is that a new government might wish to adopt the radical notion of evidence-based policy making. Regrettably, there hasn’t been too much of that from either Labour or National in the last 11 years (since the second Todd Task Force in 1997

Thanks to Michael for his comments.

Well the NZ Herald has finished the second part of what was in total around 15 pages on John Key’s family, history and background. This comes on top of a Sunday Star-Times in depth investigation in Europe and the US of Key’s history as a currenct trader and manager at Merrill Lynch.

None of them turned up anything remotely dubious, which is quite atonishing. Let me tell you that if three journalists spent six months researching my past, there will be much galore. God – just Otago University alone could fill up a chapter or two. Most of us have done really stupid stuff that we later regret and would not have done in hindsight.

One of the NZ Herald stories was on the fight for Helensville. It is all history now but there are one or two aspects to it, I had some knowledge of and can comment on.

Simpson says he briefly considered looking outside of Auckland but for family reasons decided against that. Among the seats Key looked at was Tamaki, held by sitting MP Clem Simich. Party officials convinced him it wasn’t a wise move because Simich had a strong electorate network.

Otherwise known as the Tamaki Mafia

In May 2001, Key made his first speech on the political stage, addressing a regional conference at Auckland’s Waipuna Lodge before a crowd of about 250 people. Slater liked the content (Key spoke about New Zealand’s place in the international scene), but felt the delivery was unpolished. “His really true character didn’t come through,” says Slater.

John also spoke to a Young National conference around then also, and had an engaging policy proposal – that one should have a literacy test for the dole. The idea being instead of getting the dole, you get paid to undertake tuition so that someone who is unemployed gets taught enough so they can at least have basic numeracy and literacy – to open up job opportunities.

On the day of the candidate selection meeting on March 17, 2002, it is alleged that the start of the meeting was delayed by more than 20 minutes so that a delegate known to be supportive of Key could make it for the vote; normally, the doors to the meeting were locked after 10 minutes.

The delayed delegate was a friend of mine, and he was a bit late to the meeting. His vote wouldn’t have affected the outcome in the end, but if he had not made it there he would not have been popular.

Regarding the door being left open, he said: “I recall that there was one delegate who had phoned 10 or 15 minutes before arrival and said they had been delayed and would be late and was that a problem. We got around that by delaying the meeting’s start by five minutes, then I did an introduction, then I saw the delegate arrive and then proceeded in the normal way.”

The delegate was delayed – the dopey bastard had slept in! And then he proceeded to make up for this by driving along the western motorway at around 200 km/hr and made it just in time!

John Key did so well, he even ended up with Brian Neeson’s electorate chair offering to help him. I like this story:

After winning the candidacy, Key asked Milich to stay on as chairman, an invitation he turned down because he and his wife were heading off overseas for an extended holiday. But before Milich left, he told Key he would help him out any way he could.

“You don’t know where to get billboards from, do you?” Key asked.

“Yeah, we’ll make them. Come around,” said Milich.

For a man who, by his own admission, doesn’t have a handyman bone in his body, it was a galling proposition for Key.

Nevertheless, Key turned up with his son Max and spent the day with Milich, hammering and nailing together billboard frames.

“I had a lot of respect for him after that day,” says Milich.

The other online story is the main 18 page one. I’m interested in the three “swift acts” he took as Leader,as the Herald deccribes them:

First, Key did a deal with chief rival English in which someone else had to lose. In this case it was Gerry Brownlee, the man who had been deputy under Brash and who clearly wanted to hold on to that job. Key cut the deal over a weekend, operating out of his Parnell home, on the phone for hours and occasionally opening his big metal gate to welcome senior party figures in for talks. English was one of them.

By Sunday night Key had managed all the egos to a point where Brownlee was convinced to step aside with English coming into a position of considerable power as deputy leader and finance spokesman. Brownlee retained an important strategic role under Key, who in doing the deal with English for an uncontested vote united the bickering factions of the party.

It is hard to over-state how important this decision was in hindsight. The caucus has never been more unified. It was pretty tough on Gerry Brownlee who had been an effective Deputy to Don Brash. But it also showed Key’s ability to be pragmactic and judge the best course ahead. John would have won a ballot against Bill, but he also needed him to be Finance Spokesperson. And to get him to agree to do that, needed make him Deputy also.

Then came the difficult task of dealing with Brash, who was making noises that he would stay on as an MP if Key gave him an attractive portfolio. For Key, a clean break was better. Having Brash sitting on his front bench was going to detract from the fresh start Key wanted, where he quickly moved to embrace New Zealand’s anti-nuclear policy and soften Brash’s Maori and welfare policies.

But Brash was handing over the leadership in the way that prevented a bloody battle and he could have been forgiven for thinking Key owed him something in return.

Brash waited for a job offer from Key that never came. Just a week after stepping down as leader Brash quit politics altogether. Key had ignored Brash’s repeated statements that he would be willing to stay and in the end the pair met to talk and it was unceremoniously over.

In the eyes of those in the caucus who had been Brash supporters till the end, it was a harsh exit.

I was one of those who at the time wanted Don to be given a senior portfolio so his talents were not wasted. In hindsight it was an emotional response, and Key did exactly the right thing by not making an offer. In hindsight I think it was better for Don also to be out of the place. Don leaving Parliament took all the sting out of the Hollow Men, apart from a few fanatical MPs who still quote it every week.

The third thing Key did was a no-brainer but it still required an element of toughness. The party’s problem child, Rakaia MP Brian Connell, began talking of returning to caucus after Key took over. Connell had been out in the cold after clashing with Brash about an alleged affair and he told media that he was ready to come back. While the decision rested finally with caucus, Key demonstrated no appetite for bringing Connell back. To this day Connell remains a suspended outsider.

A third tough call. This was one I agreed with at the time, as I thought Brian had caused trouble for not just Don Brash but also Bill English before him, and there was no reason to think it would be different for John.

Having said that, I actually think it is time for the suspension to be lifted. He is retiring from Parliament in a few months, is supportive of the new National candidate for Selwyn and has not been outspoken in the last year. It would be nice for Brian to be able to finish his time in Parliament back in the National caucus.

Chris Trotter SST column last weekend generated so many negative responses, that the SST has even put some of them online.

Much better in my eyes is his column in Friday’s Dom Post on what he believes in. Let’s look at them:

A column entitled From the Left conjures out of its readers imaginations a veritable phantasmagoria of political misconceptions. The most common of these is that, being “From the Left”, I must favour the policies Joseph Stalin and Mao Mao Tse- tung.

Problem is, I rejected their credo of Marxist-Leninist communism long ago.

I am curious as to how long ago, and why?

So, what do I believe?

It’s a fair question, and here, for better or for worse, is my reply:

I believe that human societies arise out of need. The need for food and shelter, the need for intimacy, the need for nurturing, and the need for protection – both from natural dangers, and the aggression of our own species. To secure these needs, human beings must work, individually or collectively, but always with the ultimate goal of keeping strong those innumerable threads that bind our communities in a functioning wholeness.

Can’t say I disagree too much with that.

In New Zealand, two peoples co-exist in differing states of awareness of the essential collectivism and dependency of human communities. The indigenous people possess a clear and poignant vision of humanity’s place in these islands. But the colonising peoples could not rest till the ideas and institutions of their respective homelands had taken root in New Zealand. To the extent they succeeded, the conflicts and contradictions of their native lands were also transplanted here.

Resolving these conflicts and contradictions, and discovering the best means of prospering together, is the historic task of the two peoples fated to share these islands Maori and Pakeha.

I think Trotter stereotypes too much here with the “indigenous people possess a clear and poignant vision of humanity’s place in these islands”, but I will agree we do have a duty to work together to resolve past conflicts.

As a social-democrat I am dedicated to furthering in all aspects of my country’s social, political and economic organisation the essential equality of human beings. Social-democracy defines equality in terms of the universality of human need.

Here I start to differ. I certainly believe in doing what we can to get equality of opportunity, but equality of outcome is an impossible nonsense, which takes no account of human nature and differences. The communist states have tried and failed repeatedly in this goal. Even Cuba is backing away from it.

If Chris means all humans have some minimum human rights, then I agree. But the right to have an Ipod is not one of them.

That being so, we must reject all claims hostile to the reality of our interdependence. Individuals and groups who by superior strength or simple good fortune are endowed with wealth and influence, enjoy their advantages on the sufferance of that vast majority whose daily labours make possible a functioning society. Only so long as, in the judgement of the many, the possession by a fortunate few of social, political and economic privileges serves the community as a whole, will those privileges endure. Any attempt by a minority to transform the privileges granted to them by the majority into a system of permanent advantage cannot be deemed just.

And here is where we totally part company. Trotter expresses a view where individuals have no rights – they are allowed to keep their money or property only if the many agree by doing so, it benefits them.

Trotter sees the majority as able to take anything away from the minority, and that minority having no rights. It is the sort of outlook that we see in Zimbabwe where the minority white farmers have had their farms stolen from them. Trotter says the only issue is whether or not it benefits the majority to do so. Now I do not mean to imply in any way that Chris supporters the horrific excesses of Mugabe – I am sure he is repelled by the dictator’s actions. But his views on the rights of the minority, seem to be similar – they have none except those granted by the majority.

As a social-democrat I look to the state, as the institutional expression of our interdependence, to secure for all citizens a healthy and abundant life.

While I look to families to secure healthy and abudant life for most people – with the state being a fallback option and a resource. I also look to business to generate the wealth that really secures an abundant life.

The provision of gainful employment, education, health, housing and protection against adversity are rights due to all New Zealanders. Political institutions are established to secure these rights, drawing their authority from the freely given consent of all responsible citizens.

The state can not provide jobs to everyone – unless one wants to go back to Muldoon. It can set an economic environment in which the private sector creates jobs. It does have a role in funding and sometimes provision of health, education and housing. But that does not mean free PhDs for everyone and a state house for every family. I beleive in targetting assistance to those who most need it.

Those charged with governing our country, hold in trust the resources – both natural and social – that are the common property of all our people.

Can’t disagree with that.

As a social-democrat I cannot countenance the arbitrary dispersal of the people’s resources, nor the slow fragmentation and dilution of their rights. And, while recognising the fundamental kinship of all human beings, I will not surrender the sovereignty of my nation to the interests of foreigners. New Zealand’s destiny, finally, is the enterprise of New Zealanders alone.

Yet Chris seems to say the minority have no rights, unless the majority grant them. No right to hold property. No right to keep most of what you earn.

And I am less concerned with national sovereignity than Chris is. Of course as a country we have it. But more and more peopel of my generation and younger see themselves as citizens of the World. Look at Europe – how mervellous to have 30+ countries joined together with no borders, and the ability to trade and work in any member country.

This is how Fridays should always be.

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The NZ Herald likes the 90 day trial period for small businesses:

The Government and the trade union movement do not see it that way. Labour Minister Trevor Mallard described it as “almost a charter for people to abuse newly appointed low-wage workers”. Such an interpretation betrays either a misunderstanding or an extremely cynical view of the aims and intentions of most employers. Why would they use it to sack employees without good reason when good staff are hard to find and much time and effort is put into training them?

Read the Hollow Men and Horowitz to understand why Mallard says this.

A more rational take on the proposed law is that it will encourage employers to give people a chance to show they can do a job. Most advantaged by this will be those who employers might otherwise be reluctant to recruit – the likes of new immigrants without good English, former prisoners, those wishing to change careers, young people without qualifications, and those with no recent work experience. National’s proposal would allow employers to take a chance knowing there will not be the prospect of complex and costly personal grievance procedures if there is a genuine problem.

Yep. With the best will in the world you sometimes just can not determine how someone will work out, until they are in the job.

This freedom has long been sought by small businesses. It was pinpointed as the “single most important change needed in employment law” by the Small Business Advisory Group, which was set up by the Government in 2003. The group identified employers’ fear of hiring new workers as a significant obstacle to business growth.

And business growth leads to more jobs, more tax, more wealth for New Zealand.

When National’s member’s bill was before Parliament two years ago, trade unions staged public demonstrations, terming it an intolerable attack on workers’ rights. In fact, New Zealand is the only OECD nation, apart from Denmark, that does not have a legal probationary period in some shape or form. Other countries have recognised the advantages to both parties.

This is hardly some hard right policy. All the leftie social democratic countries in Europe already have this in their law.

A scrap between medical unions:

Ian Powell, executive director of the senior doctors union, defended the “inalienable right to strike” in a weekend speech. But he said it was being misused, and therefore undermined – to the detriment of patients’ safety – by unions clustered around Deborah and Terry Powell’s company, Contract Negotiation Services (CNS).

Ian Powell is certainly not the first person to note the effect of Deborah Powell on the health system – her unions do tend to strike without fail.

Ian Powell characterises the CNS unions as “bargaining agents”, in contrast to the “broader-based unionism” of his own organisation.

He told a dental conference on Saturday that bargaining agents focused on what they could “scratch out” of the health system, while unions like his also focused on what they could put into it.

“Regardless of motivation, seeing patients as weapons is an inevitable consequence of a bargaining-agent approach, whereas the broader unionism approach sees them as natural allies.”

Not unfair criticisms.

Deborah Powell accused Ian Powell of hypocrisy, saying his own union had come close to strike action.

“I suspect his motivation is to support the Labour Government, as the CTU unions seek to do.”

Also not unfair criticisms back.

I actually don’t like it when unions fight each other as it is just like the Iran-Iraq war – never knowing what side to back

It is disappointing but not totally surprising that National is not making changes to Working for Families in its first term.

There are two aspects to Working for Families which I don’t like. They are:

1. Families with six figure incomes get what is effectively a welfare benefit
2. The overall tax and abatement rate for parents earning above $60,000 is around 89% (39% tax rate, 25% accom supplement abate and 25% WFF abate off memory)

Now the solution to no 1 would normally be to just abate WFF at a faster rate. But that then makes problem no 2 even worse. So the other solution to no 1 is to have it start abateing at a lower level or to reduce the level of payment for everyone.

Now if one pursues the latter possibilities, you want to do it in a way where tax cuts compensate so no one gets a take home income drop. This is not the time to be reducing anyone’s take home income.

I suspect it just got too difficult to try and design such a scheme in Opposition. I actually worked in the early 2000s with Lockwood Smith on some potential tax formulas which could take into account number of children, and hence deliver all assistance just through the tax system. The problem is many families pay negative income tax, so that wasn’t possible. Plus I am not sure IRD would have appreciated having a parabolic equation as part of the tax code

My hope is that if National is elected, they will get officials to look at a way to restructure Working for Families and the tax system, and then go into the 2011 election with that as a policy for which they seek a mandate. The deadweight costs of high income families paying tax which just gets delivered back to themselves as WFF welfare is quite considerable. If we want to grow the economy faster than Australia we do need to reduce this “churn”.

Matt McCarten looks at the fight over the proposed law change to ban total remuneration packages from including the employer contribution to KiwiSaver:

My union, Unite, represents thousands of minimal-waged workers and few have joined despite a $1000 start-up from the Government and up to $20 a week tax credit.

That’s because someone on the minimum wage would have to contribute 48 cents an hour which they can’t afford when food and petrol prices are soaring.

And this law change will make it illegal to pay them more money if they do not go into KiwiSaver.

I think Thompson is genuinely outraged that KiwiSaver discriminates on age. Workers under 18 and over 65 don’t get the scheme’s subsidies. Mallard claims that as youth rates have been abolished and as older workers are entitled to Government superannuation that somehow makes it acceptable. Well it’s not. It’s clearly discriminatory and unfair.

So this is the head of the Unite union agreeing the the EMA Northern that the scheme dsicriminates agaianst the poor, young and old!

It is an outrage that young workers and older workers who pay their taxes are not allowed to join a scheme their colleagues can. Thompson’s view, which has some merit, is that the workers who aren’t entitled or can’t afford to join KiwiSaver don’t get the subsidy and therefore, effectively, an employer is paying some workers a higher benefit than others.

Exactly. The overall costs to the employer should be the same.

The only way the scheme would be fair was if it was compulsory for all employees so any contribution by employers would be paid to everybody.

It is becoming close to de facto compulsory and I suspect it will become compulsory at some stage.

If KiwiSaver became widespread it would inevitably lead to the weakening and abolition of universal superannuation.

KiwiSaver is privatisation of superannuation by stealth. The poor and those unable to take up employment will miss out and will end up with some state-funded pauper’s pension.

I support KiwiSaver partly because it is an effective privatisation. And McCarten is right that it will inevitably lead to a move away from the current universal publicly funded superannuation scheme. A 25 year old today will earn more money in retirement from KiwiSaver and NZ Super than they will during their working life. That is nuts, and inevitably public superannuation will be made less generous as more and more people have KiwiSaver.

I accept that the Government and trade unions don’t trust employers not to use their compulsory contribution as leverage in contract negotiations. But it seems better-off workers can receive a taxpayer subsidy as well as their employer’s subsidy while their poorer colleagues get nothing.

Indeed. Employers should be able to offer a total remuneraton package where if an employees chooses not to go into KiwiSaver, the employer can pay them extra cash.

Kiwiblog is five years old today. Contrary to what many may think I was not one of the early bloggers. I got into it six to twelve months after it started to get relatively popular. My inspiration was the now dead NZ Pundit, which I got addicted to reading every day.

One day I decided to give it a go myself and Gordon K kindly set me up on his server alongside NZ Pundit.

It has been somewhat weird that in five years it is now the activity I am most associated with, when it is in fact still just my hobby.

So what are the stats for the last five years:

• 10,702 posts
• 342,229 comments
• 1,424 unique tags
• 2,972 registered commenters
• Approx 9,500,000 visits
• Over 2.5 TB of data downloaded

Kiwiblog should hit visitor number 10 million in September!

The annual FitnessNZ 50% of gym membership promotion for new members starts tomorrow, and Kiwiblog readers are getting an exclusive early opportunity to take advantage of it, as the site is now active.

The rules are that it is open for anyone who is not a current member of a gym, nor has been a member in the last 12 months (nor has take up the promotion in 2006 or 2007). You can buy a membership for someone else provided they qualify (even if you do not).

Gym memberships are often $1,000 a year, so this can save $500 or so. A great opportunity to finally take out the membership you have been thinking of.

I’m not getting paid to promote this. As not one cent  of SPARC (ie taxpayer) money is being spent on the promotion, I’m happy to support it as a private sector public health initiative.

It would be churlish not to acknowledge that the visit to NZ of US Secretary of State Condoleezza Rice was a good thing, and primarily happened due to Winston’s personal efforts.

Peters said he wanted to focus on improving relations with the US, and he has suceeded in this to a reasonable degree. Some of it is fortunate timing (as China gets more aggressive in the Pacific we become more useful to Washington) but he has been able to pursue a closer relationship in a way a Labour Minister would not and could not have.

Rice even referred to NZ as an ally. Now that may not be a change of policy, but it still has some significance. As we fight with the US in Afghanistan it is ludicrous we can not officially train with them, and it is time for the US to drop the silly little ban which is againgst their own interests.

Less likely is significant movement on a free trade agreement. Rice has just six months left in office. Obama appears to be against free trade, and even if McCain wins the new Congress is looking to be highly protectionist.

Having the US use NZ, and specifically Winston, as a small non threatenign proxy for the West in dealing with North Korea was quite inspired and again Peters did well there.

So Winston was at his best charming Dr Rice this weekend. I am unsure if he will do so well on Tuesday trying to charm Sir Robert Jones!

The HoS quotes former NZ First staffer (and commenter here) Rex Widerstrom:

Peters has said he has “no involvement with that trust” administered by his brother, but former NZ First staff member Rex Widerstrom told the Herald on Sunday he was prepared to swear an affidavit stating the trust was set up around the time of the Winebox Inquiry to funnel anonymous donations from people who wanted to support Peters’ various legal battles.

He said he had the opinion that during his time with Peters there were occasional discussions in the NZ First parliamentary offices about the Spencer Trust, and he was absolutely convinced Peters had knowledge it existed and what its function was.

He recalled one conversation between Peters and ex-staffer Sarah Neems when Neems asked Peters if a donation should go into the Spencer Trust and Peters agreed it should.

So Winston has nothing to do with the Spencer Trust apart from the fact his brother runs it, his staff collect money for it and he decided if donations get paid into it or not?

If it is for legal expenses rather than party expenses, then this calls into question even more his declaration of pecuniary interests. If this is a second secret trust to pay his legal bills, it should have been declared.

Another former NZ First staff member – who did not want to be named – said it was his understanding the name “Spencer” was decided on because of Peters’ great admiration for his namesake Winston Churchill. Churchill’s middle name was Spencer and for years his photograph hung in Peters’ Wellington office.

I’ve had many people pint this connection out to me. Of course the mere possibility Winston may have named the Trust doesn’t mean he has anything to do with it!

I blogged on Friday about how the infamous quote:

“Political war is about evoking emotions that favour one’s goals….while mobilizing passions of fear and resentment against your opponents.”

was not advice to Don Brash on what to do, but in fact David Horowitz describing what the left do in America.

Now Trevor Mallard, commenting on National’s industrial relations policy last night on TV3, delivered a very well scripted soundbite, which seemed to be following the Horowitz interpretation of the left-wing playbook to perfection. It was delivered in one burst, but I have broken it up into phrases below, with imagined commentary from Horowitz.

Mallard: What this does is implement John Key’s promise to lower NZ wages.

Horowitz: Good work: don’t debate the issue, just misrepresent it by dredging up an ancient lie.

Mallard: It does it by lowering the wages of people when they are sick.

Horowitz: Excellent – make something up, scare people, keep working on the fear and resentment.

Mallard: By taking their holidays away.

Horowitz: Outstanding, you didn’t even smirk as you lied to the camera.

Mallard: And through the fire at will provisions.

Horowitz: Nice – you didn’t mention the 90-day aspect, and you avoided mentioning the ‘hire’ part of it, and didn’t smirk. Branding it the ‘fire at will provision’ will make many fearful, even angry, about all this. Most importantly, you didn’t make any attempt to actually debate the policy issue. Go to the top of the class.

I think we will use the “Horowitz angle” to examine many of Labour’s statements during the campaign.

Radio NZ has talked to Professor Malcolm Wright who worked for Sir Robert in 2005. They report:

Professor Malcolm Wright, who worked for Sir Robert three years ago, says he recalls Mr Peters and a staff member visiting Sir Robert for drinks in 2005, where the issue of a donation was discussed.

“Sir Robert was opposed to making a donation. In the end, though, he agreed that he would. There had been a higher sum asked for, and Sir Robert said: ‘Well, I’ll give you $25,000 for mateship’, which Winston agreed to, and they shook hands on that.”

Professor Wright says he was told some days later by one of Mr Peters’ staff members to make a cheque out to a trust, although he cannot recall its name. He says Sir Robert thought the money was going to New Zealand First.

Now it is worth remembering that Professor Wright was a first hand witness to this. Peters has made it clear he is going to attack Jones’ credibility and recall. But Professor Wright seems very clear on the salient details.

There are two coups in the air – one in Australia, and one in the United Kingdom. Let us take the UK one first.

As Labour MPs face decimation, Gordon Brown’s position is perilous. He may become the first UK Prime Minister since Neville Chamberlain to never face a general election.

The Telegraph reports:

Gordon Brown is being openly undermined by Cabinet ministers who are now publicly questioning his future as Prime Minister.

The Labour Party has no option but to replace him as leader or face certain defeat at the next general election, said one.

“We cannot go any lower,” the minister said, following Labour’s disastrous defeat in the Glasgow East by-election, one of the biggest upsets in political history.

“We are at rock bottom. The evidence is there for all to see. We are not a one-nation party any more. We are now a no-nation party. We cannot win in Scotland, we cannot win in England, we cannot win in Wales.

“There is only one thing that can be done, and it’s a change of leader.”

Another Cabinet minister added: “It has just moved from possible to probable that Gordon will be toppled.”

Apart from losing one of their safest seats, Labour is 22% behind the Conservatives in the latest polls – this would give them a 236 seat majority.

What will be interesting is who replaces Brown. It may be a poisoned chalice.

The other mounting coup appears to be in the Australian Liberal Party.

Peter Costello served as Deputy Leader and Treasurer to John Howard for over a decade. Howard refused to stand aside for him and when the Libs lost the 2007 election, it looked like Costello’s career was also over.

He did not contest the leadership post-Howard, realising Kevein Rudd could be expected to serve at least two terms, and that he was unlikely to survive to become PM one day. So he did not stand and made noises about retiring.

But things have changed. Brendan Nelson has been a very unimpressive leader, while the ambitious Malcolm Turnbull is mistrusted by many of his colleagues.

But why would Costello be reconsidering just because of that? It si because he thinks he can beat Kevin Rodd at the next election. Now Rudd is still very popular and ahead in the polls, but his focus on stunts is starting to gain negative publicity. But more relevant is the economy. Costelle presided over a decade of economic growth. If the Australian economy is not in good shape in 18 months time, then Costello will be seen as proven economic manager who could win against Rudd.

This is not as certain as Brown being a goner. But Costello is showing all the signs of keeping hos options open:

PETER Costello will map out an ambitious reform agenda in his political memoir – including a pathway to a republic – giving him the platform to launch a bid for the Liberal leadership.

The former treasurer will use his much-anticipated autobiography, to be published in October, to outline a list of priority reforms.

He will also lay out challenges facing Australia in a move to distance himself from John Howard’s “conservative” agenda.

And if things go well there may be a NZ leadership election later this year also!

Inevitable and sad, but on his way out he touched tens of millions of people.

Randy Pausch has died aged 47. He is most well known for his last lecture, which is one of the most inspiring works I have encountered.

I’ve blogged it once before, but for those who have not seen it, here it is again.

It will be one of the better ways you can spend an hour.

The failure of Peters to close these issues down was obvious on TV One last night. Their political editor, Guyon Espiner, is usually reluctant to be categorical on an issue, but he made it very clear that he saw the press conference as avoiding all the relevant questions.

Young and Trevett in the Herald report:

Serious credibility questions remain for Foreign Minister Winston Peters after he failed yesterday to throw any light on what happened to a $25,000 donation given by Sir Robert Jones in 2005 for Mr Peters’ NZ First Party.

Sir Robert said he was dismayed at what Mr Peters said yesterday and believed a police complaint will follow shortly – although he said he would not be making it.

If the Spencer Trust will not tell Sir Bob what they did with his money, he should demand it back as it was given on condition of helping NZ First’s election campaign.

He predicted that Mr Peters was “going to die on his own sword on this matter”.

Mr Peters said the police would not be “so naive or uninformed or unprofessional” to investigate the matter.

That sounds like close to a threat to me?

He also said that Roger McClay – a former adviser to Mr Peters – asked for the cheque to be made out to the Spencer Trust.

Wayne Peters had sent Sir Robert a receipt from the Spencer Trust.

So Winston’s staff member asks for the money to go to the Spencer Trust and his brother recepits the money yet WInston claims like Sergeant Schultz to know nothing.

Mr Peters protested his ignorance of the Spencer Trust yesterday and said Sir Robert was wrong.

“Bob’s memory is failing him here.”

Mr Peters said he had not solicited the donation, as Sir Robert claimed.

So who did? Can Peters explain why Jones would donate to the Spencer Trust?

He said he had no involvement with the Spencer Trust, that he did not know what the trust had used the money for, and that he had not spoken to his brother about the trust.

There are so many people he does not speak to. His lawyer over his legal fees, his staff over their fundraising activites on his behalf and his brother over the trust set up to support his party.

Maybe next he will deny even knowing his brother?

The NZ Herald Editorial:

Rather than answer that or any other question yesterday, Winston Peters said he was “not required” to disclose anything about the Spencer Trust. “New Zealand First is not going to subject itself to demands not required of any other political party or leader.”

That is nonsense. If any other party or leader had asked for a cheque to be made out to a mysterious trust and never accounted for it, Mr Peters would be scandalised.

Exactly.

Corruption is a word seldom heard in political debate here except from him – often, ironically, on the subject of undisclosed contributions. It rolls off his tongue much too readily when other parties’ dealings are under discussion.

We do not propose to treat him as he treats others. We will not believe there is wilful dishonesty unless it is proven beyond doubt. The very suspicion of corruption is poisonous to public confidence in government and politics. To spread such poison without proof does almost as much harm as corruption itself.

What is becoming clear to me is we need a very powerful investigative body that can deal with suspected wrong-doing by the powerful.

John Armstrong:

Trying to bring Peters back into the real world – rather than the fantasy world he has been inhabiting for the past fortnight – is not an act of kindness. It is an act of necessity to stop NZ First’s downward spiral taking Labour with it. …

This time Peters’ usual response to crisis – the bluster, the diversions, the smokescreens and games over semantics – are not going to suffice. …

But Clark holds all the cards, not Peters. Were she to sack him, Peters technically could pull NZ First out of its support arrangement with Labour. But the only loser from that would be NZ First. Jumping ship would make it look like NZ First put Peters’ ego ahead of stable Government. It would demonstrate that NZ First can never be trusted to stay the course. It would be electoral suicide. …

The question is how mant weeks will Clark let this carry on for?

Kitchin and Watkins in the Dom Post:

Sir Robert Jones has accused Winston Peters of “lying” about a $25,000 political donation.

Will Winston sue Sir Robert for defamation? I suspect not.

Mr Peters lashed out yesterday at what he labelled a campaign of “innuendo and character assassination”. He insisted he had done nothing wrong after revelations by The Dominion Post that Sir Robert’s $25,000 cheque for NZ First was not disclosed to electoral authorities.

In response, Sir Robert accused Mr Peters of talking “rubbish”. “I’m very sad that Winston has now resorted to blatant lying,” Sir Robert told The Dominion Post.

It really was a mistake for Peters toget into a scrap with Jones.

But his version of events, in relation to the circumstances in which the $25,000 cheque was given, is completely at odds with Sir Robert’s.

The tycoon said Mr Peters had approached him seeking money for NZ First a month before the 2005 election. Sir Robert said he signed a blank cheque and one of his staff later made it out for $25,000 to the Spencer Trust.

Sir Robert said: “I would have been happy if he [Mr Peters] had spent the money on what it was intended for – NZ First … but this Spencer Trust, I’d never heard of it till it was drawn to my attention this week.”

I think people would be shocked to learn exactly how much money the Spencer Trust has had donated over the years – and with never a cent of it declared as having been donated to NZ First. So either the Trust is sitting on a huge bank balance or it has been spending the money in some way to benefit NZ First.

And that expenditure may constitute an effective donation in kind which should have been declared. If they paid for advertisements on their behalf it certainly would. If they paid the wages of campaign staff members then less clear cut. The issues of legality are almost impossible to determine without actually knowing what the Spencer Trust has spent its money on.

AUSA has retracted its $5,000 reward for anyone who makes a citizen’s arrest of Condoleezza Rice. I suspect someone pointed out to them their liability if a student trying to “win” the $5,000 got seriously injured doing so.

The AUSA President, David Do, who offered the reward is an active Labour Party member and a former Princes Street Branch Chair. Maybe a journalist can ask Helen her view of her party members trying to get the US Secretary of State arrested? [UPDATE: David Do tells me he resigned his Labour Party membership last year]

I’ve been told that the even bigger dicks in VUWSA has gone and offered a $10,000 reward – if true this would be from compulsory student fees.

The Canterbury student politicians seem more sensible, quoting the UCSA Blog:

As a student association, is this really their core business? Does arresting Condi help students in any way?

It’s crazy shit like this, which casts doubt on the credibility of Student representatives/politicians, and really hampers the effectiveness of our core responsibility, which is to represent students at our respective Universities.

Meanwhile Whale Oil offers his own $5,000 reward for a citizen’s arrest:

Popular and competent blogger Whaleoil has followed the lead of the Auckland University Students Association in offering a $5000 reward for the arrest of a well known criminal who has recently entered New Zealand: Winston Peters.

Cameron notes:

“And just before Peter Low gets on the phone, the competition is not open to triad gangs,” adds Slater.

Heh. For the avoidance of doubt I will point out the post is satire, not a literal accusation of criminal behaviour!

This latest issue is coming down to a credibility test of Peters vs Jones. Now whenever two people are giving contradictory statements that can not be reconciled, I look at motivations. If one of them is lying, then why?

I just cannot see a logical reason for Sir Robert to not be telling the truth. What does he have to gain? Plus his version of events has been backed up by Professor Malcom Wright, his former General Manager, who now lives in Australia. Sir Robert says he had donated up to $250,000 to Winston/NZ First/Spencer Trust/Brian Henry Legal Fund over the years. This doesn’t seem like the actions of someone who would try to destroy Winston’s career by lying about said donations.

The Dominion Post has revealed that Ross Meurant collected cheques from the Vela Family for Winston/NZ First/Spencer Trust/Brian Henry Legal Fund and Sir Robert (plus other sources) have confirmed Roger McClay also collected money for Winston/NZ First/Spencer Trust/Brian Henry Legal Fund.

Now both these men were close friends of Winston’s, but more to the point were employed in his parliamentary office. The rules over what you can do as a parliamentary staffer are open to some interpretation – but there can be no doubt you should not be going around meeting potential donors and picking up cheques off them. Maybe someone will argue they did this in their spare time. But the significance is they worked for Winston personally – not the party. The Party President and Party Deputy Leader both say they have never heard of The Spencer Trust. Are we to believe that staff in Winston’s private office somehow magically found out about it, from someone other than Winston, and on their own initiative decided to go around soliciting money for it?

The Herald picks up on the stacking of half the new Transport Agency board with Labour affiliated politicians.

In the last few months almost every Labour Party activist in the country seems to be picking up taxpayer funded board jobs.

Now I have never advocated that those with political involvement and experience should be ineligible for board appointments. And in some cases it can be useful to have a board member with some political saavy. And likewise it is understandable that a Minister will want perhaps one or two people on the more critical boards who understand politics to the degree that they can help the Board avoid actions which will put them on a collision course with the Government.

And being realistic, if a Minister has several candidates of equal quality, then the one personally known to the Minister will be at an advantage.

Now having defended some appointees with a political background, why am I critical of the latest rash of appointments? No not just because it is Labour. I will give some guidelines I think all Governments should use, and that National also has broken in the past.

1. Never have those with political connections forming a majority or even close to a majority on a board. That threatens good governance. National was guilty of this in the 1990s when I think every single member of the Lottery Grants Board was National connected. Now sure that only doshes out money but it is a very bad look. If a board has more than a couple of persons with political connections, then it loses credibility.
2. Unless someone was already a professional company director (or widely seen as possessing similar skills), they should not be appointed to more than a couple of boards. An individual should not have so many appointments that they earn a close to or higher than six figure income from board appointments. The appointment of Di Yates to four separate boards is an example of that. If they put her on only one board, no-one would probably grumble (except her fellow board members) – but four boards is ridiculously venal.
3. Appointees must bring genuine value to a board – their appointments must be based on merit, even if they have political connections. Appointments are always somewhat subjective but there are some clear differences in competence. For example I wouldn’t criticise the appointment of Garry Moore to the Transport Board as he has significant governance experience. But I can’t see how the appointment of Christine Caughey is in any way based on merit. The same for Di Yates on on Food Standards Authority – they were so desperate to justify it they had to include living in Waikato as a credential.
4. The more important a board, the more critical it is that the apointees be top class. I don’t get particularly worked up about an appointment to the Waikato Sports Trust or the Lottery Grants Youth Committee etc. But the boards of the large SOEs are critically important, as are the top regulatory boards. The Electricity Commission has been stacked with Labour affiliates – which is a massive concern. And this week I have focused on the Reserve Bank Board – a prime example of a board which needs the highest calibre of appointees, and those who can bring some real value to the area of monetary policy.

No-one should think a National-led Government is never going to appoint some of its former MPs, or others politically connected, to various Boards. Of course they will. But if appointments are in line with my proposed guidelines, then they should face significantly less criticism.