Kiwiblog

Matthew Hooton has written on ACC in his opening salvo for NBR. It is only available in the tree version, but some extracts:

In 2001, Australian insurance giant HIH collapsed with debts of around A$5 billion, caused by gross mismanagement, including charging too little for premiums and failing to put enough aside for claims.

The Australian authorities took the matter seriously, including Prime Minister John Howard, who established a royal commission. The company’s principals were jailed for offences including knowingly disseminating false information, filing false financial statements, being intentionally dishonest and failing to discharge their duties in good faith and in the best interests of the company.

I think I know where Matthew is going with this.

This week, New Zealand’s biggest insurer, ACC, reported a NZ$4.8 billion loss on top of a NZ$2.4 billion loss the previous year.

Like HIH, ACC’s crisis was knowingly hidden from the public. The Treasury’s Pre-Election Economic and Fiscal Update, signed by then finance minister Michael Cullen, did not disclose it, a failure subsequently found by an independent inquiry to have breached the Public Finance Act.

Yes my suspicions are correct.

Even worse were the public statements of then-ACC minister Maryan Street.
On June 26, 2008, ACC was apparently strong enough for Ms Street to announce that 400,000 casual and seasonal workers would get improved cover.

On September 11, she had enough confidence in the company’s finances to announce a re-elected Labour government would cut the motor vehicle levy from $254 to $203.

Three weeks later, and just five weeks before the election, Ms Street was at it again, announcing an expansion of ACC entitlements to people over 65.

The most charitable interpretation is that the former university academic might suffer from some advanced form of oniomania that makes her believe that, despite ballooning liabilities and a global financial crisis, it was possible to keep buying new services from ACC, while cutting its revenue, and expect it to remain viable. Alternatively, perhaps she was just telling lies in the heat of a close election campaign.

I had to look up what oniomania is!

Far from turning itself in to the Serious Fraud Office, Labour now has the audacity to launch a new narrative that accuses ACC Minister Nick Smith and ACC chairman John Judge of establishing some kind of conspiracy to privatise the scheme.

Audacity is the nicest word for it. I still think it is a pity the Government did not demand prosecutions for the breach of the Public Finance Act!

Colin Espiner blogs on ACC:

I said I’d post something on ACC, so here goes. Oh dear, what a mess.

It’s hard to know where to start really. Is it all Labour’s fault for increasing entitlements but not premiums? Or the people at ACC, who seem keen to pay themselves large salaries but can’t apparently count? Or the recession? Or the fully funded model? Or all of the above?

When news first broke earlier this year of a hole in the ACC accounts, many of us – and I include myself – were a bit sceptical of National’s motivation, particularly given that excitable boy Nick Smith was in charge, and he is known for, well, exaggerating from time to time.

But the conspiracy theory peddled by Labour and the EPMU (i.e. Labour) that somehow this is all just a VRWC to derail the ACC, lower public confidence in it, and then sell it to the highest (or any) bidder just doesn’t ring true for me.

I can never work out if Labour is the political arm of the EPMU or if the EPMU is the industrial arm of Labour.

For starters, I can’t believe someone with chairman John Judge’s commercial background is going to put his reputation on the line just to help the Government push a particular political ideology. Judge is not going to claim that the very existence of the ACC is under threat if it’s not.

Second,  there have now been three relatively independent reviews of ACC’s financial position, and all of them have come up with the conclusion that it is in the poo.

I actually laugh everytime David Parker insists you can’t trust the Government’s figures, considering the last Government’s failure to mention the ACC blowout broke the Public Finance Act. This is not an area of credibility for them.

Third, there’s little doubt that the additions made to the scheme by Labour a couple of years ago – including things like lump-sum payouts for the families of suicide victims, and physiotherapy, simply aren’t affordable any more.

An employee on the average wage is now paying over $1,000 a year to ACC. That is a huge amount of money.

Having said all that, I do think Nick Smith has over-egged the pudding a little bit. At least some of the need for the big increases is because of the move towards fully funding the ACC.

Fully funding means that like a commercial insurer, ACC is required to hold enough in reserve to meet the claims it expects to have to pay out on over a given time. It has never operated like this before, but is now required to.

Originally this was to happen by 2014. The Government – and in fact Labour too – wants to push this out to 2019. You could question whether ACC should in fact ever be fully funded, but that’s another argument.

I want to cover this argument in detail one day. Michael Littlewood has written at length that a Government backed insurer does not need to depart from the old model of collecting enough every year to cover payments for that year.

The Government is also going to get some heat over the decisions it’s made, and so it should. The massive increases in levies for motorcycles seems grossly unfair to me, and smacks of National hitting a group of voters it doesn’t think are likely to be National supporters.

Sure, motorcycles are involved in more accidents, but how many of those were caused by car drivers? As a former motorcyclist myself, it was being knocked off my bike by some idiot in a car that prompted me to hang up my helmet.

Even under the changes, motorcyclists are being subsidised by other drivers. A motorcyclist is 16 times more likely to be involved in an accident. Not even if half are caused by motorists, that is still eight times more likely.

Ramping up motorcycle levies also flies completely in the face of all the rhetoric from the Government about reducing congestion, cutting carbon emissions, using less petrol, etc etc. Not to mention parking.

The purpose of ACC is not to incentivise people to cut carbon emissions, reduce congestion etc. You have other taxes and policies for that. The purpose of ACC is to cover the costs of accidents.

I hear National doesn’t have the votes to get the changes through Parliament yet, either, although it probably will manage it eventually because it’s cleverly set up a straw man in the form of even higher increases proposed by ACC that don’t require a law change.

Therefore if parties don’t vote for National’s bill, the Government can accuse them of agreeing to even higher imposts on the public. That is quite clever.

I don’t think it is clever. I think one should get 61 votes in favour before you announce the changes.

Also Whale Oil has a post on a payout to children of someone killed in an accident. I think there should be some initial support, but when did it happen that  ACC funds you until you are 18, if your parent dies in an accident. If your parent drops dead from a heart attack you get nothing, but if it is an “accident” you get ACC. The original scheme was about looking after people temporarily until they could work again – not social welfare.

At NBR today, I blog on the Government’s triduum horribilis. The opening para:

It is hard to recall a more chaotic few days for the Government. It is not that any wheels totally fell off the wagon, but all four wheels seemed to come loose at the same time, with John Key trying to refasten them all simultaneously.

Comments and feedback can be left at NBR.

The Herald reports on Mike Moore’s new book:

Mr Moore said more wealth had been created in the past 60 years than in all of history. Hundreds of millions of people had been lifted out of extreme poverty through globalisation.

Yet so many have fought against it. An unholy alliance of the hard left and far right.

Mr Moore said globalisation was “not a policy, it’s a process” and while it could be slowed it could not be stopped. Fascist and Marxist states that arose after the Great Depression had been vicious and protectionist.

And one great legacy of Helen Clark (and Moore and Goff) is firmly placing NZ Labour into the mainstream on globalisation and pre free-trade.

Protectionism was the “crack cocaine” of economics. “It does stimulate you for a while but it is addictive and it will eventually kill you.”

Nice analogy.

The cover has endorsements by former US Secretary of State Madeleine Albright, and former Czech President Vaclav Havel. It was launched jointly by Foreign Minister Murray McCully and Labour leader Phil Goff.

Again good to see bipartisan support for globalisation and free trade.

I worry a bit about where Labour may go, after Goff. Either Shane Jones or David Cunliffe will I am sure be pro free trade. But Andrew Little may not be, as unions are often heavily protectionist.

A great column in the Herald by Eric Crampton:

Sometime soon, we’ll see a report showing that the social costs of skiing are in the hundreds of millions of dollars. It wouldn’t be hard to produce a number that large. First, show frequent skiers are more likely to have accidents than recreational skiers.

Then, make the critical assumption that nobody could ever rationally decide to take risks – health is all that matters. Frequent skiers then are by definition irrational, and irrational people enjoy no benefits from their ski outings, no matter how happy they appear.

With this “zero benefits” assumption, every dollar spent on skiing by these harmful skiers is a social cost, as is the time these folks spend skiing. Add the realised costs from those folks who do have skiing accidents and you’d quickly have a number in the hundreds of millions of dollars, if not billions.

Such a good analogy.

Any time we make a decision that lets us enjoy a bit of fun but with some risk to our health, that decision is considered irrational and cannot generate any real enjoyment.

Consequently, benefits are either assumed equal to zero or set to an arbitrarily low level.

But is it really irrational to trade off health against other goals? I have a hard time imagining somebody for whom health isn’t a good.

But I similarly cannot imagine anybody for whom health is the only good. We all trade off risks to our health against other goals we seek, all the time.

If you saved a few dollars by not buying the most expensive baby car seat on the market, you decided that the very small extra increase in safety for your child isn’t worth the money.

If health and safety were our only goal, the world would look very different. We would all buy cars made of padded foam rubber and drive very slowly. That we don’t is strong evidence that we have pluralistic sets of values – we are not monomaniacal healthists in our daily lives.

Absolutely. You want a zero road toll. Set the speed limit to 30 km/hr.

If we tally up the social costs of driving with a cellphone, we ought to recognise that accident costs need to be weighed up against all of the benefits that drivers enjoy from being able to take the occasional call while on the road – we oughtn’t have our thumb on the scales by assuming the benefits away.

And this is why I am critical of the Government for their moves here. Nowhere have I seen measurement of the benefits vs the costs of cellphone use in cars.

For every skier who dies in an avalanche, tens of thousands of others took no fewer risks but enjoyed a great time out on the slopes. Their enjoyment ought to count for something.

And, for every drinker who dies in an accident that could have been avoided were he sober, there are countless others who simply enjoyed a good night out.

Yes. And forcing bars to close early (for example) will stop many having a good night out.

Some interesting research from the Families Commission. Only 100 families involved, but still useful results:

The most common disciplinary techniques for under 5s were:

1. Time Out 82%
2. Distraction 77%
3. Rewards 76%
4. Praise 69%
5. Withdraw Privileges 60%
6. Reasoning 58%
7. Smacking 41%
8. Shouting 41%
9. Ignoring 38%
10. Hugs and Smiles 31%
11. Make child apologise 18%

They also rated effectiveness:

1. Time Out 43%
2. Withdraw Privileges 30%
3. Distraction 27%
4. Rewards 24%
5. Praise 11%
6. Reasoning 10%
7. Smacking 9%
8. Hugs and Smiles 9%
9. Shouting 5%
10. Ignoring 5%
11. Make child apologise 2%

The Herald reports:

Police have apparently cleared National MP Kanwaljit Singh Bakshi of wrongdoing in an alleged immigration scam without interviewing a key accuser who has now returned to India.

The accuser, Darshan Singh Saran, provided a sworn statement that threats and pressure from influential figures in India silenced a key complainant in the case against Mr Bakshi.

But friends yesterday said Darshan Singh Saran had left New Zealand unexpectedly without being interviewed by police.

Counties-Manukau police yesterday indicated a statement would be released saying Mr Bakshi was to be cleared – but nothing was sent out. A spokeswoman said investigations were finished and had been checked out by the legal team.

How very disappointing that Darsham is not prepared to talk to the Police, to back up his allegations.

Was at the Green Parrot having some drinks and food with a few good folks. They were celebrating a political victory that day.

One lass felt the need to share with the table that she has had a shag in the bathroom at the said establishment. The conversation went like this:

Lass: You know I’ve had a shag in the toilets here
Everyone: God, why did you tell us that
DPF: Do you remember his name
Lass: Of course I do
DPF: Well does he remember your name
Lass: lost for words

Rest of the table high fives DPF.

The Government has just announced a $10 billion deficit, and the need to borrow $250 million a week. So what does the CTU recommend to make things better:

Council of Trade Unions economist Bill Rosenberg says rather than pull back spending, New Zealand needs to borrow more to keep the economy ticking over.

“Making sure that all of us have enough money to spend to keep the economy going, to keep jobs going and make sure the economy doesn’t go into a downward spiral.”

I think someone needs to explain to the CTU that when you borrow money, you have to pay interest on it, and have to pay it back one day. And the more interest you have to pay on debt, the less money there is for hospitals and schools etc.

I look forward to hearing whether Labour endorse the CTU’s call for bigger deficits and more borrowing. So far they have voted for or indicated support for an extra $6 billion a year of borrowing, so I guess they do.

My weekly column:

Buy of the Week

Another politician in trouble is Australia Liberal Leader Malcolm Turnbull who has AUS.TURNBULL stock has risen from 50c to 57c after publication of a poll showing him polling as only the third most preferred Leader for the Liberals – amongst Liberal voters. Once the polls are that bad it is hard to survive. I think it is time to start buying.

Sell of the Week

An interesting swing against the trend for MIN.DEPART2.09 which pays out if a second Minister leaves the Ministry this year. The price had dropped to 11c on the 12th of October but over the last two days swung up to 15c. The Rugby World Cup broadcasting fiasco is what has probably led to the price increase, but with John Key directing a compromise I expect the price to fall again.

Wait And See

A similar stock MP.POWELL has also increased this week from 50c on 4 October to 68c today, paying out if a National List MP resigns and is replaced by Conway Powell. The NZ on Air demand that Melissa Lee’s company repay $80,000 has obviously triggered this price spike.

Whanganui

I short sold CITY.WHANGANUI at around 70c, but today purchased them at 50c to cover it. This means I think the price will rise. Why? Well after the fiasco over the Maori TV bid for the Rugby World Cup, I don’t think the Government is going to want to piss the Maori Party off any further by turning down a name change.

Top Trading Stocks

The Roy Morgan poll stocks had almost $14,000 of trades, following the payouts when the latest polls were published. The Auckland Bus Strike stock had $5,400 traded and the 91 petrol price just over $4,000.

Cheers,

David

Disclosure

David’s current iPredict positions are:

BROWN.RESIGN Short, CITY.WHANGANUI Short, DL.KING.09 Short, FASA04.REPEAL Short, GST.UP.JULY10 Short, LEAD.GOFF.09 Short, MAYOR.BROWN Long, MIN.DEPART2.09 Short, MP.ANDERTON Short, MP.PETERS.2011 Short, NAT.MAORI.09 Short, OBAMA.DISAP.4NOV Short, OCR.INCR.APR10 Short, OCR.INCR.JAN10 Short, PETERS.LEADER Long, PM.2011.NATIONAL Long, UK2010.CON.ABS Long, UK2010.CON.MAJ Short, ZIM.MUGABE Short

Links to stocks in this commentary: AUS.TURNBULL, MIN.DEPART2.09, MP.POWELL, CITY.WHANGANUI

Firstly the unions are back to squabbling with the Minister, and it is unsure how sifnificant the agreement trumpeted yesterday is. I have asked the Minister’s Office whether or not the actions planned to make it difficult for media to report league tables includes any changes to the Official Information Act.

So long as the OIA is unchanged, I don’t see how one can stop people compiling whatever tables they want. Hell, I might even help set up a wiki where parents can report the data for their local schools

So for me I don’t care too much what the Govt does, so long as they do not touch the OIA.

But on the subject of the education unions loathing for any sort of comparison of school achievement, I have to quote this wonderful note placed on Facebook yesterday by Mark Unsworth:

I totally support the teacher unions right to protest against being able to rank schools according to how well they perform. This cuts across the hunt for mediocrity which is so important to some in NZ .How dare some parents who want to know how good an education their children are getting.!! And as for the media having access to the information !Bloody hell what would Stalin have thought about that?

I would like to see this move taken further however.
I would start with Fair-Go, Target and the Consumers Institute and that dreadful Consumer magazine that tells us which products and companies and service providers are dodgy or unreliable. Who needs that useless information?

Magazines that reviewed and ( gasp) rated cars ,electronic goods, and new technology need to be ditched as does LINZ which tells us which suburbs are considered desirable. Imagine what would happen if that information got out? Wine, beer and restaurant reviews and rankings, what a waste of effort .Do we really need to know how good a wine is before we drink it? Doesn’t that take the fun away. The same goes for those silly websites travelers use to check out accommodation. A bed is a bed no matter whether its 1 or 5 star, you still fall asleep.
Next on the bonfire would be rankings of investment returns for Kiwisaver and other super schemes. People who can find out who is performing well poorly will only go and move their money and we don’t want that do we. Best we protect those who are not up to the job just like we do with teachers and schools.

NZ will obviously need to pull out of any agencies such as the UN ,WHO,OECD,ILO etc that rates how we compare with other countries on a wide range of indices. That material would be dangerous in the hands of taxpayers wouldn’t it ?

The media need to have a jolly good look at the way they report sport as well. Do we really need league tables for rugby, football netball etc? Surely it’s the taking part that matters. Who really cares about “Top 4 finishes” and semi-finals? It’s all too elitist .I can imagine the TAB may struggle paying out bets when all horses are deemed to have crossed the line together but they will cope .

Last and not least we need to ensure that some of the dangerous new Apps available on i-phones overseas are permanently banned .They allow phones to scan barcodes and customers can find out how one retailer’s price compares with others around the country. That would cause mayhem and only encourage consumer choice. Who needs that in NZ?

I have huge respect for the hard and often unrewarding job that teachers do. However the blinkered view that the teacher unions have that says neither individual teacher or school performance can be measured can only ever be detrimental to our future .They need to move into the real world .

Bravo.

A good editorial from The Press also.

The Press reports:

The decision was surprising given that Attorney-General Chris Finlayson and Police Minister Judith Collins had signed a 2003 petition calling for a commission of inquiry, he said.

As did many professors of law.

Rich said the decision was “sadly predictable”.

“It’s interesting we’re spending millions on a Supreme Court building but still directing people to the Privy Council, which I doubt Peter Ellis will be able to access because of the expense,” she said.

Ouch.

“In the court of public opinion, Peter Ellis has already been pardoned.”

On most controversial cases, there are different views on guilt vs innocence. The Ellis case is remarkable in the huge number of people who view his convictions as unsafe. I don’t think I know anyone at all who thinks the convictions should stand.

The case was a fundamental demonstration of the justice system failing to correct itself, she said. “Every country has found a way to deal with those injustices.”

And this is where I think the Minister made the wrong decision.  Of course the officials were always going to have dozens of reasons to say don’t upset the status quo. But the reason we have a Minister in charge, not officials, is for the ability to look at the wider picture.

Brash said he was surprised at the decision because the request was presented with such strong arguments and the 2003 petition had been signed by major figures.

“The New Zealand justice system has let Peter Ellis down and it should have been New Zealand that sorted it out.”

Had he won the 2005 general election, a commission of inquiry would have been ordered, he said.

I really recommend people interested in this case read the Lynley Hood book. If you do you will, like Don Brash, be convinced that the current convictions are very unsafe.

I think the Government is making a mistake by not conceding the law (passed by its predecessor) needs changing. The Herald reports:

The Immigration Advisers Authority has issued 18 warning letters to people it says are breaching the Immigration Advisers Licensing Act since it became law on May 4.

But a director of a defunct migrant workers support centre which received a warning says the authority is using the act to “attack migrant support services” rather than police dodgy immigration advisers. …

Mike Bell said he was forced to close the Skilled Migrant Resource Centre, a registered charity which operated as a drop-in support centre for skilled migrants, after being served a letter from the authority’s solicitor in July.

“I was told the reason I was sent the warning letter was because of my appearance on a TV3 news report where I apparently presented myself as an immigration adviser,” he said.

“Being served a notice like this, with up to seven years’ jail as a penalty, I took it very seriously.
“As a result, New Zealand’s only dedicated facility for skilled migrants was closed down.

Great.

Registrar Barry Smedts denied that the legislation was being used to target non-advisers, but would not say how many of the warning letters had been issued to unlicensed fee-charging advisers.

“The act is in place to protect migrants from poor advice from would-be experts. Forewarning letters have been sent to individuals whose activities appear to breach the act,” Mr Smedts said.

And this is the wrong focus. The focus should be to protect migrants from scamsters who offer a commercial service to assist people with gaining residency or work permits. By claiming their job is to protect against poor advice, suggest the Govt is guaranteeing all advice given will be “good”. I think most people can understand the difference between advice on a blogsite, or someone giving opinions on a TV interview, and a professional immigration advisor.

Certain people at VUWSA are so aghast that their official policy is now to support VSM, they are planning to illegally overturn the result? How do you do that? Well Salient reports:

It has been brought to Salient’s attention that VUWSA will hold another SRC meeting this Friday at 11am in the Mount Street Bar.

Notification of the SRC meeting was placed on the VUWSA noticeboard on Wednesday afternoon. [Photographic evidence to the right. JJW]

The notice says that the meeting will be held “pursuant to part IV s. 2 (3-4) of the VUWSA Constitution.”

However, part IV s. 2 (4) of the VUWSA Constitution says that “such special meeting shall be held no sooner than three (3) office days and not later than ten (10) office days after the date of receipt of a requisition [for a meeting], or resolution by the executive.”

Fewer than 48 hours will have passed between the notification of the SRC, and the meeting actually being held, directly contravening the procedures outlined in the constitution.

So an illegal meeting, in breach of their own constitution, held in a bar at 11 am on a Friday (when all good students are hungover) is the first response of the compulsion lovers.

But it gets even better. After forceful representations about the illegality of the proposed Friday meeting (not that the forces of compulsion did the same thing at WSU – hold a vote with only a day or two’s notice) including a potential injunction, the compulsionaters have come up with an even better plan.

They have simply declared the Wednesday meeting void  on the grounds two VUWSA people declare a quorum count of 45, less than the required 50. Now note the resolution was passed with 80 people voting and a later quorum count (with one independent person) found there to be over 60 people present, and this count was done within the 30 minutes allowed in the constitution.

This is a prime example of how unaccountable some associations are. VUWSA never questioned the legitimacy of the Wednesday meeting, until after they realised they could not legally hold a repeal meeting on Friday.

UPDATE: A student captured the meeting on video, which is now on You Tube.  It is in Part 1, Part 2 and Part 3. You can easily see there are way way more than 50 people there. In fact I am told it was one of the most well attended SRCs in recent years.

I understand also that signatures are being gathered from around 60 people who will testify they attended the SRC at all times, and put their hand up for all quorum counts.

The NZ Institute of Chartered Accountants (and Tax Mgmt NZ Ltd) has produced a report recommending a major simplification of taxation for micro and small businesses.

Their goal is for a small business to only have to spend one hour a month filing a single tax return.

For micro-businesses (defined as earning under $60,000 with no employees except owner), they propose that they simply pay 15% of their turnover as taxation (incl ACC levies).  This means no having to work out exact expenses (estimated to be 50% of turnover). It will also make it easier to collect tax on cash income.

The tax would be payable to IRD at least annually but more often if desired. An option to would be to designate to a bank your work account and have the bank automatically transfer 15% of all deposits to the IRD so you can’t spend it and get into arrears.

A small business is defined as turnover less than $1.2 million, registered for GST. Their proposal is to eliminate the need to monitor dividends and salaries to owners, and an imputation credit account. The business simply pays income tax alongside GST at the rate the owners are liable for.

Also no provisional tax, FBT or entertainment tax, and trading stock is dealth with on a cash basis, so no stocktakes.

These changes could affect many businesses. 90% have less than five employees and two thirds of those are run by owner operators.

NZICA make the point that the corner dairy faces the same rules as the largest corporates. Some will argue that is a good thing, but the compliance costs are considerable.

They propose both models be opt-in, so businesses could continue with the status quo if they wanted to.

You can provide feedback at www.smetax.co.nz.

I like the micro-business proposal especially. It really would only apply to people starting their business up, but that is when you want things to be simple.

I see some merits in the small business proposal, but not sure it reduces complexity as much as desired.

Claire Trevett covers Parliament yesterday. I have to say I thought Lockwood was in awesome form as Speaker.

First of all he handled a huge amount of complaints from Labour MPs about his decision to now allow signs about an industrial dispute to be displayed on boxes, so they get seen on TV. The rules allow party logos, but not signs or slogans. You could see certain Labour MPs were right on the brink of either walking out, or trying to wallop Lockwood. Even normally good natured Darren Hughes was pushing it, by slapping a box off a desk onto a seat, rather than placing it there.

But no way was Lockwood being partisan. Gerry Brownlee obviously did not want to answer the question about when the Government decided to back or fund a TVNZ bid but Lockwood kept insisting that as the question was set down, and factual, it deserves an answer. Gerry tried arguing that as no amount had been discussed, he could not answer that but Lockwood insisted. Look at this exchange:

10. BRENDON BURNS (Labour—Christchurch Central) to the Minister of Broadcasting: When did the Government decide to offer financial support to a TVNZ-led bid to gain the free-to-air rights for the Rugby World Cup?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Minister of Broadcasting: The Government is committed to the concept of a stadium of 4 million people supporting the Rugby World Cup in 2011. Free-to-air broadcasts of matches must, therefore, have the widest possible coverage. The Government is united in that view. However, the specifics of any costs have not yet been determined.

Hon Trevor Mallard: Point of order—

Mr SPEAKER: I do not need a point of order. The question on notice asked a very straight question: when did the Government decide to offer financial support to TVNZ? Either the Government has or it has not offered support, but the House deserves to hear an answer to the question since it was on notice and it is a straight question.

Hon GERRY BROWNLEE: And I gave a straight answer. The specifics of any costs have not been determined.

Mr SPEAKER: The question on notice did not ask what the cost was. The Minister is perfectly at liberty to point out that the Government has not decided to offer financial support, but the question asked “When did the Government decide to offer financial support to a TVNZ-led bid to gain the free-to-air rights for the Rugby World Cup?”. It may be that the answer is that the Government has not decided to do that, but if it has, the question asked about when it decided. It did not ask about how much money is involved. I ask the Minister to answer the question.

Hon GERRY BROWNLEE: I raise a point or order, Mr Speaker. You are deciding to interpret the question as being one that is correct. I would love to know where the verification that the Government has made such a determination came from in the first place. I decided—

Mr SPEAKER: I invite the Minister to resume his seat. A perfectly fair answer to the question would be that the Government has not made such a decision. That is a perfectly proper answer, but the Minister did not offer the House that answer. It is a perfectly fair and proper question, and there is public interest in it. I believe that the House deserves to hear an answer. Forgive me; I am not interpreting the question. “When” is a very simple word.

Hon GERRY BROWNLEE: The Government has not determined the specifics of any costs that may be required.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Again, I say the question was one of timing, and “when” is a very simple word. I think your office has been supplied with material from the Hon Jonathan Coleman, which I am sure people will be finding for us now, indicating that the Government had made that decision. All—

Mr SPEAKER: I do not want to get into debating the substance of the matter. The question simply asked “When did the Government decide to offer financial support?”. It did not ask about the specifics; it asked when a decision was made to offer financial support. It may be that it is not in the public interest to reveal that, but the question has been on notice for some hours and I think the House deserves to hear an answer.

Hon GERRY BROWNLEE: I have said three times that it has not made that determination.

I really can’t recall any previous Speaker being so willing to force an answer out of his or her own party’s Ministers.

Audrey Young writes:

Prime Minister John Key has just shown why he is Prime Minister.

His intervention yesterday in the debacle over the Rugby World Cup was perfectly timed.

It could not have come any later without the issue getting completely out of control.

But it probably could not have come any earlier, either.

It would have been nicer if it hadn’t become necessary.

Mr Key’s late leadership on the issue stands in marked contrast to his ministers, many of whom have contributed to the chaos.

Labour is pointing the finger largely at Rugby World Cup Minister Murray McCully over the saga, not least because he gave the Te Puni Kokiri chief executive a burst at a Beehive meeting. Mr McCully carries a fair degree of blame but more for what he hasn’t done than what he has.

He has been absent as Foreign Minister for a large amount of time and neither his World Cup deputy, Gerry Brownlee, Mr Coleman, or Mr English have taken charge.

That leadership vacuum was exacerbated when Mr Key was absent during some critical stages of the MTS bid.

Dr Sharples is not blameless, either. It is clear that he and Te Puni Kokiri kept knowledge of the $3 million TPK commitment to themselves. And when Dr Coleman asked Dr Sharples about the bid, he dissembled, saying he didn’t know much about it.

Hopefully a lesson learned for everyone.

Maori Television has been given a reprieve from being gazumped by a higher bid. But its celebration should not be too premature. In a sense it has been returned to the position it found itself in after the TPK funding had been revealed.

Maori Television have a great opportunity ahead of them. The challenge now is to deliver high quality coverage.

Bernard Hickey writes:

I’m beginning to lose faith in John Key’s willingness to truly reform this economy so his grandkids and my grandkids have an economic future that will keep them (and us) here.

I’ve listened for the last year to John Key’s comments about wanting to catch up with Australia by 2025 and about making changes to improve productivity and real wages so that we remain an attractive destination for our very mobile labour force. But will he actually do anything? Will he take some tough decisions and show some leadership?

All we’ve heard so far is what John Key won’t do. He won’t put up the retirement age from 65, despite everyone in officialdom saying the current threshold for entry into our universal pension scheme cannot be sustained. He won’t change the pension from its current 66% of the average way, again despite everyone saying it’s unsustainable. He won’t entertain even the idea of a capital gains tax.

The superannuation decision is just a political reality. Key promised before the election he would resign as both PM and an MP if he changed the age or floor for super. It is naive to keep lobbying on an issue after that. If he did what Bernard said, he would be finished in politics.

The capital gains tax is a more fair criticism. While Key has not ruled it out entirely, I think it is unhelpful he has been so dismissive of the possibility, while the tax working group does its stuff.

And now he won’t allow the cabinet to think about a flat tax, despite National saying in its election campaign that it aspired to flat (corporate/income/trust) tax rate of 30%.

Now here Bernard is being naughty. National did not in any way say it aspired to a flat tax. Even ACT did not campaign on a flat tax.

National said it aspired to a top tax rate of 30% for individuals, companies and trusts. And that is a laudable goal. But that is not a flat tax. Under the 30c tax rate you have a 15c tax rate and a 21c tax rate.

Maybe John Key is playing a clever long game where he plays everything down until the very moment he announces it, possibly before the next election. Or somehow he has left himself enough wiggle room to announce reforms that haven’t already been ruled out.

While disagreeing with Bernard on a couple of the specifics, I do think he has highlighted that the Government does have a real challenge ahead of it. The gap with Australia will not close without significant reforms, and the more reforms that get ruled out, the harder it is to be credible about closing that gap. Expectations are high for the 2010 budget.

The Herald reports:

Fresh from controversy over its coverage of psychics in the Aisling Symes case, TVNZ is deciding whether to buy another series of Sensing Murder – the commercially successful show that has been caught in a company receivership. …

TVNZ says it will not make a decision on another series until it has shown the one that it has “in the can” sometime next year.

I really hope they do not. The program feeds on human misery and tragedy, and promotes fakes who make money out of tragedy and gullibility. It has no redeeming quality.

Words can’t express how gutted I am that Simon Power has declined a Commission of Inquiry into the Peter Ellis case. I really hoped he would finally be the person to do the right thing.

The justification is that Peter Ellis has not exhausted all his appeal rights as he file an application for special leave to appeal to the Privy Council.

They also cite advice from Crown Law that such an inquiry may be ultra vires, as Ellis (unlike Arthur Allan Thomas) has not been pardoned. This is a classic argument of form over substance to my eyes. So the Government has to make its mind up that he is innocent and pardon him before they can establish a Royal Commission to investigate if he was innocent!

I really hoped Simon Power would not just go along with the recommendations of his officials, because it was always inevitable they would oppose this.

Nick Smith has announced some changes to the ACC scheme, to make it more affordable and stop huge employee levy and vehicle levy increases:

• Reversing 2008 income compensation extensions covering casuals, part-timers, non-earners and abatements for holiday pay
• Reversing entitlements for wilfully self-inflicted injury and suicide
• Strengthening disentitlements for criminals
• Enabling safety incentives for employers and vehicles
• Extending full funding date from 2014 to 2019
• Requiring far more open reporting on ACC’s liabilities

The changes are hoped to reduce ACC liabilities by $2 billion.

ACC costs have risen by 57% in the last four years. So even with those changes, levies still have to increase. They are:

• a $32 increase in the motor vehicle levy taking the fee for a petrol car up from $136.44 to $168.46
• ACC petrol levy will rise from 9.34 cents per litre to 9.90 cents per litre
• Motorcycle levies to now vary by size going from $252.69 for all to $257.578 for under 125 cc, $511.43 for 125 – 600 cc and $745.77 for over 600cc

The Herald reports:

Prime Minister John Key has intervened in the rugby television rights row, issuing a directive that Maori TV will be the lead bidder.

In a major u-turn for the Government, Mr Key’s directive means the competing TVNZ bid backed by Broadcasting Minister Jonathan Coleman will be taken off the table.

Mr Key and Maori Party co-leader Pita Sharples today said Maori TV, TVNZ and TV3 were meeting in Auckland this afternoon to sort out the bid.

This sounds greatly preferable than having rival taxpayer-funded bids ratcheting the price up. A pity it has taken Prime Ministerial involvement to bring this about – it should have never gotten to this stage in the first place.