Archive for the ‘New Zealand’ Category

NZ General Social Survey 2014

May 26th, 2015 at 12:05 pm by David Farrar

Stats NZ has released results from the General Social Survey they do every two years. They show that for most NZ families, things are better than in 2008. Some comparisons:

  • Families who say they have enough money have gone from 51.3% in 2008 to 62.8% in 2014
  • Families who say they do not have enough money have gone from 15.4% in 2008 to 12.2% in 2014
  • Families who say just have enough money have gone from 33.3% in 2008 to 25.0% in 2014
  • The proportion feeling safe walking home at night has gone from 51.5% in 2008 to 60.9% in 2014

Some other interesting data:

  • 82.6% rate their overall life satisfaction as 7/10 or higher
  • 70.5% of unemployed rate their overall life satisfaction at 7/10 or higher
  • 73.0% of families with income under $30,000 rate their overall life satisfaction at 7/10 or higher
  • Only 24.6% of families with income under $30,000 say they do not have enough money to meet everyday needs
  • Recent migrants are happier with 88.3% saying they rate their overall life satisfaction as 7/10 or higher
  • Those rating life satisfaction as 7/10 or better are Maori 77.9%, Pasifika 78.1%, Asians 81.5% and Europeans 84.1%
  • 86.4% say they are in good or better health

In terms of being comfortable with a new neighbour who is different to them:

  • 76.4% comfortable with new migrant
  • 76.0% comfortable with different religion
  • 75.1% comfortable with GLBT neighbour
  • 74.8% comfortable with different ethnicity
  • 51.7% comfortable with mentally ill neighbour
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NZers views on local government

May 25th, 2015 at 4:45 pm by David Farrar

LGNZ have had Colmar Brunton do a large survey of NZ residents and businesses on local government. The initial results aren’t complimentary but it is a smart move by LGNZ to do such research, because it provides a benchmark to try and improve against for their member governments.

The survey is here. Some extracts:

  • Performance rated 28/100
  • Local leadership rated 26/100
  • Communication and interaction rated 32/100

The bottom three areas for the public are:

  • Trust to make good spending decisions
  • Value for rate dollars spent
  • Managing finances

Councils need to learn to live within their means. Rates should stay constant, except for inflation and population. Annual increase of 3% to 10% are antagonizing the public.

The five most important services for the public are:

  1. Roads 45%
  2. Town facilities and amenities 42%
  3. Water supply 30%
  4. Rubbish/recycling 26%
  5. Sewerage/wastewater 18%

So Councils should focus on the basics above, and do them well.

Again a very good initiative by LGNZ doing this research, Hopefully Councils will take it into account.

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Another Uber reason

May 25th, 2015 at 3:15 pm by David Farrar

I’be blogged before on how much I’m enjoying Uber – their booking app, the ability to see where the car is, and the automatic payment to your card.

But I’ve now got another reason. On Friday grabbed an Uber and the car smelt a bit of smoke (it was a driver who is also a taxi driver, not a dedicated Uber driver). So when the app asked me for feedback I gave it 3/5 only and commented about the smokey smell.

30 minutes later I had an e-mail from Uber apologising and saying they will talk to the driver, saying that doesn’t meet their standards. Great customer service.

And also impressive is that the next day I got an automated e-mail from them asking me to rate the quality of their response.

Compare that to trying to complain about a taxi driver to their company!

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Midwives advocating against vaccinations

May 24th, 2015 at 4:00 pm by David Farrar

Stuff reports:

Expectant parents are being advised against vaccination by the very nurses and teachers who are supposed to give babies the best start in life.

The Immunisation Advisory Centre has received complaints of midwives and pregnancy class teachers trying to dissuade families from giving babies the MMR jab, despite overwhelming medical evidence that immunisation saves lives.

Dr Nikki Turner, the centre’s director, said some of the advice was “jaw-dropping”.

Women are being told vaccines are dangerous, unsafe or don’t work. In other cases there is no discussion of vaccine benefits. 

Any medical professional who lies about vaccines should face disciplinary action.

NZ College of Midwives advisor Lesley Dixon denied there were any midwives providing bad information. When told of midwives sharing anti-vaccine articles with expectant mums, Dixon said: “Women find the midwife that works for them.”

The College of Midwives time and time again seems to think their role is to defend all midwives, rather than uphold professional standards. At first they deny any midwives peddle anti-immunisation propaganda, and then when told there are some, just casually say people have a choice. They express no concern at all that their members are spreading information that may kill babies.

Parents were often not aware that having the whooping cough or flu vaccine during pregnancy also provided protection for the newborn baby, she said.

Whooping cough has caused four infant deaths over the past four years. A woman and her baby also died after contracting the flu in September 2013.

“Their deaths may have been preventable if the mothers were vaccinated,” Turner said. “It would be useful to have curriculum standards so if people chose to teach outside the curriculum you can challenge them.”

You expect nonsense from people who are not health professionals. But very disappointing to have so called health professionals giving such discredited advice.

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Is there any point to Rewa going on trial?

May 24th, 2015 at 12:00 pm by David Farrar

Phil Taylor writes in the HoS:

Malcolm Rewa murdered Susan Burdett. No other conclusion is possible.

He was the only assailant at her Papatoetoe home on the night of 23 March, 1992, when she was battered and raped.

He expertly got in and let himself out like the cat burglar he was, as he did in his attacks on so many other woman.

We know Rewa was there because his semen was in her body. …

The detective in charge of the case, Detective Inspector Steve Rutherford, since retired, put his finger on it in the weeks after the murder, telling media: “We believe that the person who had sex with her, murdered her.”

The Privy Council panel that in March quashed Pora’s convictions for rape and murder, went this far: “The man who raped Burdett was undoubtedly Malcolm Rewa,” Lord Kerr said.

I think there is no reasonable doubt Rewa murdered her.

Solicitor-General Mike Heron, QC, has ruled out putting Rewa on trial a third time, telling the Privy Council after it quashed Pora’s convictions that “no exceptional circumstances exist to justify lifting [the] stay” put on the Rewa murder prosecution 16 years ago by his predecessor after a second jury couldn’t decide about murder.

For the sake of Burdett’s family, and for justice, we say he should rule it back in.

He is already in jail for her rape. Is the cost of a massive trial worth it, when the practical impact is nil? It would be nice for the family to have it judicially confirmed that Rewa was both her killer and rapist, but Rewa has a sentence of preventive detention for his 24 rapes and is never going to be released from prison anyway.

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Canon Media Awards winners

May 23rd, 2015 at 10:00 am by David Farrar

Some winners from last night’s Canon Media Awards:

  • Best Blog – Jarrod Gilbert
  • Best Website – nzherald.co.nz
  • Newspaper of the Year – NZ Herald
  • Weekly Newspaper of  the Year – Sunday Star-Times
  • Reporter of the Year – Jared Savage
  • Junior Reporter of the Year – Talia Shadwell
  • Politics Reporter – David Fisher
  • Business Reporter – Matt Nippert
  • Best columnist – humour/satire – Deborah Hill Cone
  • Columnist of the Year – Michelle Hewitson
  • Wolfson Fellowship – Shayne Currie

Congrats to all the winners.

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Match speeds to risk

May 22nd, 2015 at 1:00 pm by David Farrar

The NZ Herald editorial:

The speed limit on any road should be appropriate to its design and condition, not the subject of a default 100km/h setting. Therefore, a good case can be made for increasing the limit on many of the country’s motorways to 110km/h. And so, too, and even more strongly, can a case be made for lowering it on many of our two-lane rural roads. The latter are, after all, the scene of a high proportion of the fatal and serious crashes in New Zealand every year.

Such was not the case last weekend when 10 people died on the roads. But that did not diminish the good sense in the call by road policing chief Assistant Commissioner Dave Cliff for some rural roads to have lower speed limits. He was reacting not to one bad weekend but to a problem that has been apparent for years and has not been tackled effectively.

As Mr Cliff suggests, many country roads, especially those with winding stretches, are simply not designed to be travelled at 100km/h. Many drivers do not have the skills or the required concentration to traverse them with a high degree of safety.

Best international practice, said Mr Cliff, would dictate that the limit should be 70 to 80km/h. At that speed, the chances of a crash being survivable would be much increased.

Some roads such as the Rimutaka Hill Road are very dangerous to do at 100 km/hr. Same with the road to Makara. Likewise many roads are safe for modern cars at 110 or 120 km/hr. I’m all for road speed limits being set based on the characteristics of each individual road.

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Ethnic projections

May 22nd, 2015 at 11:30 am by David Farrar

Stats NZ has released projections for the change in our ethnic populations. They project for 2038:

  • European 66% (-9% from 2013)
  • Maori 20% (+4%)
  • Asian 21% (+9%)
  • Pacific 11% (+3%)

Around 2025 the number of Asian New Zealand is expected to exceed the number of Maori New Zealanders.

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What a criminal!

May 22nd, 2015 at 10:45 am by David Farrar

The Herald reports:

Panai was fined $330 and disqualified from carrying passengers for one month after he pleaded guilt to driving for three hours more than his allowed time.By law, drivers must take a 30 minute break after every 5.5 hours of work time.

Defence counsel Simon Mount said Panai took a 25-minute break instead.

That criminal. he took a 25 minute break, instead of 30 minutes.

Thank you NZ Police for keeping us safe from these criminals. And very pleased as a taxpayer to see this prosecuted in court.

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Radio Awards winners

May 22nd, 2015 at 9:15 am by David Farrar

The Herald reports on the winners of the 2015 NZ Radio Awards:

  • Sir Paul Holmes Broadcaster of the Year – Mike Hosking, Newstalk ZB
  • Best Newsreader – Hilary Barry, RadioLIVE
  • Best Talk Presenter – Mike Hosking, The Mike Hosking Breakfast, Newstalk ZB
  • Best Talkback Presenter – Leighton Smith, The Leighton Smith Show, Newstalk ZB
  • Best Sports Presenter/Commentator – Tony Veitch, Newstalk ZB
  • Station of the Year – The Edge, MediaWorks
  • Best New Broadcaster – Luke Howden, Hokonui Southland and South Otago
  • Best Journalist – Jessica Williams, RadioLIVE

Congratulations to the winners.  The full list of winners is at http://radioawards.co.nz/winner/init

 

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Could it be Henry vs Hosking?

May 22nd, 2015 at 8:30 am by David Farrar

John Drinnan writes in the NZ Herald:

Following the announcement that John Campbell is leaving Mediaworks, the company will be tempted to place Paul Henry in to Campbell’s spot at 7pm, continuing with his morning experiment broadcasting on TV3 and RadioLive from 6 am to 9am.

On the face of it that would be a disastrous decision, turning around the target audience and abandoning a newly revived following. Their audience is diametrically opposed and Henry has had a rotten start in his morning show ratings.

But chief executive Mark Weldon and board member Julie Christie love Henry as the face of the company. MediaWorks has already made it clear the new show would not be just a tweaking of the Campbell Live format.

I think some on the left would actually explode in outrage if the 7 pm slot was a choice between Mike Hosking on TV One and Paul Henry on TV3.

That is of course an excellent reason to do it!

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1st time since 1991 net migration from Australia has been positive

May 22nd, 2015 at 7:00 am by David Farrar

In April 2015, there was a net inflow of 100 people from Australia to NZ – the first net inflow since 1991.

Here’s what April has looked like for the last decade between Australia and NZ:

  • April 2015 +100
  • April 2014 -240
  • April 2013 -1.930
  • April 2012 -3,410
  • April 2011 -3,080
  • April 2010 -1.430
  • April 2009 -1,520
  • April 2008 -3,040
  • April 2007 -2,380
  • April 2006 -1,660
  • April 2005 -1,990

The annual stats are shown below:

ausmigrationapr15

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Campbell leaves TV3

May 21st, 2015 at 3:55 pm by David Farrar

Mediaworks announced at 2 pm today that John Campbell is leaving TV3.

The timing is appallingly cynical – to release it at the same time as The Budget.

Media rightfully have a go at press secretaries who try to release bad news at the time of a major event, to hide it. Well how can you expect them not to, when media companies do exactly the same!

Mediaworks have said they offered John Campbell a three year contract last November, which he declined.

They decided to change Campbell Live from five to four nights a week, and Campbell said he doesn’t want to continue with a reduced programme. That is his right.

I think John Campbell is a very talented broadcaster, even though I disagree with his obvious politics. His heart is in the right place, and he campaigned on issues he believes in. The fact his show got such a bounce in the ratings after the possible closure become public is a tribute to him.

I’m glad they are not replacing Campbell Live with some reality TV show, but will still have a current affairs programme on for four nights a week. It won’t be Campbell Live, but what matters is the journalism, not who does it. We’ll have to see if the replacement show will do serious current affairs, or do fluff pieces.

I hope we will see John Campbell come back on television somewhere – maybe even on TVNZ. Again I don’t have to agree with his politics, to appreciate the work both John and his wider team have done to produce a show that makes a difference.

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Quenched

May 21st, 2015 at 2:52 pm by David Farrar

Stuff reports:

Run out of alcohol, and don’t fancy driving to get more? A new Wellington delivery service promises to bring it to your door within 45 minutes.

Quenched,  founded by friends David Loveridge, Tom Brown and Anika Rani, officially launched last week – but already it has come under fire for providing an easy way for drunk people to “refuel”.

It’s a lot better option than people driving to the bottle store!

New Zealand Medical Association chairman Stephen Child said he deplored any move that made it easier to access alcohol in a way that could lead to abuse.

All alcohol can lead to abuse, so I presume Dr Child wants all vineyards closed down?

However, Loveridge said Quenched aimed to provide a convenient and fast service, not to encourage irresponsible drinking.

“Everything is legal, and we definitely don’t want to encourage bad drinking.”

The delivery team checked buyers’ identities on arrival, and would only hand over the order to the person who made it, he said.

If the clients were underage or intoxicated, the order would not be delivered. Instead, the customers would received a full refund, but be charged a $20 callout fee.

Sounds responsible.

“It’s been quite good. We’ve been run off our feet, which is fantastic.”

The idea to start up an alcohol delivery business started with a run and ended with a beer.

“My mate Tom and I went for a long run and we were pretty knackered when we got home, so we got a couple of stubbies but before we had showers we wanted another one, but we didn’t have any left.

“And we couldn’t walk because we were sore from the run. We needed a solution to that problem, and that is what we did.”

I think it could prove very popular. Yes there will be some who will drink to excess (and do so regardless of this service) but for many it will just be an extra convenience, and reduce the temptation for someone to drink drive.

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11 Herald facts on God and NZ

May 20th, 2015 at 3:15 pm by David Farrar

The Herald, as part of a series on religion in NZ, has these 11 facts:

  1. Rich Kiwis have turned their backs on God and religion, with religious New Zealanders living mainly in poor suburbs.
  2. Wellington is the “godless” capital of New Zealand, with five in 10 people there saying they have no religion. And Dunedin is the godless capital of South Island, with almost half of the city’s population declaring the same.
  3. In the South Island, Haupiri in Grey District has the highest percentage of Christians, thanks to the Gloriavale Community. In the North Island, Temple View in Hamilton has the highest percentage of Christians, thanks to the popularity of Mormonism.
  4. Auckland is the only New Zealand city becoming more religious, with a 1.2 per cent increase in religious residents in the 2013 census.
  5. But across New Zealand, the number of people declaring themselves religious has fallen 5.5 per cent since the 2006.
  6. The earthquakes in Christchurch failed to bring people back to God – Christianity lost 16.5 per cent of the flock there.
  7. Nelson and the Coromandel are centres of New Age spiritualism. Both areas have recorded the highest percentages of people who follow new age religions.
  8. South Auckland is one of the most religious areas in the country.
  9. Auckland has the biggest Muslim population, with 2.4 per cent of its population following Islam. Walmsley and Wesley towards West Auckland are areas with highest percentage of Muslim population.
  10. The number of wiccan and witchcraft covens have fallen from 2082 to 1452 followers in the last Census. And the number of people who say they worship Satan has fallen from 1167 to 843.
  11. Wiccans and Satanists are most likely to be New Zealand Europeans.

So in a fight the wiccans outnumber the satanists almost 2:1.

Interesting that Wellington is leading the way for cities becoming non-religious while Auckland is becoming more religious.

You can check out on the map provided, the religious profile of your local area.

In my local area unit of Thorndon (deprivation decile 5) we are 49% no religion, 41% Christian, 2.8% Buddhist, 2,5% Hindu, 0.8% Jewish and 0.5% Muslim.

 

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Wellington town belt to expand

May 20th, 2015 at 2:30 pm by David Farrar

Stuff reports:

Wellington’s town belt looks set to increase in size by 100 hectares and be given greater legal protection.

The town belt is 400 hectares in size, and stretches from Mt Victoria to Te Ahumairangi Hill.

Wellington City Council drafted the Wellington Town Belt Bill in 2013 and the process of Parliament enacting it into law has begun. 

If it becomes law, 100ha of land will be added to the town belt from Northland, Highbury, Aro Valley, Mt Cook and Roseneath. 

Wellington would not be the great city to live in it is, without the Town Belt. Very supportive of seeing other areas of council parks formally made part of the town belt, to protect it.

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Team Innocence

May 20th, 2015 at 7:00 am by David Farrar

Stuff reports:

Michael October’s murder and rape conviction could be the first case challenged by a high-powered team formed to investigate suspected miscarriages of justice in New Zealand.

Charitable trust The New Zealand Public Interest Project (NZPIP) will launch on June 1. Its panel will investigate potential injustices.

The conviction of Michael October, who spent 11 years in jail for the 1994 rape and murder of 22-year-old Christchurch woman Anne-Maree Ellens, is among four high-profile criminal cases in its sights. Civil proceedings of public interest, including test cases and class action, could be considered.

The voluntary board consists of sociologist and University of Canterbury (UC) lecturer Jarrod Gilbert, UC dean of law Chris Gallavin, private investigator Tim McKinnel, lawyers Nigel Hampton QC and and Kerry Cook, forensic scientist Anna Sandiford, legal expert Duncan Webb, and founder of investigation firm Zavest Glynn Rigby.

Gilbert said countries including England and Scotland had independent criminal cases review commissions that pursued potential miscarriages. While these organisations were created and funded by Acts of Parliament, successive New Zealand governments refused to establish a similar body.

I’d like to see such a body in New Zealand. We generally have a very good justice system, but beyond doubt there are cases (think Peter Ellis) where innocent people get convicted. In the US there is no doubt a number of innocent people have been executed, as DNA evidence allows us to look at old evidence with new ability.

In the absence of a government body, its a good thing to have a group of people volunteer their time to investigate cases where they think there may have been a miscarriage of justice. It doesn’t mean they’ll be right, but new evidence can come to light (think Amanda Banks).

I’m not sure Mr October is a great initial case for them. While he claims his initial conviction for murder and rape is due to a wrong confession (think Teina Pora), he also did some very serious offending in 2011 of which there is no dispute:

Fifteen years after his conviction for the schoolyard rape and murder of a Christchurch woman, Michael Wayne October has been jailed for 21 months for strangling and threatening to kill his girlfriend.

October, who now goes by the name Mikaere Oketopa, told his girlfriend during the July 30 incident at his home: “This is the last night you will have air in your lungs.”

He also told her: “Too bad your son’s not going to have a mother.”

Oketopa stopped the attack when she told him she loved him and let her body go limp.

She said later she believed she was going to be killed.

Of course this doesn’t mean he was guilty of the 1994 murder.

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Name and shame by CTU

May 19th, 2015 at 10:30 am by David Farrar

Stuff reports:

Farmers seeking staff for the new milking season risk being named and shamed on social media if the money being offered in their job advertisement  is below the minimum wage.

Outgoing Waikato Federated farmers dairy chairman Craig Littin revealed that trade unions were picking apart farm jobs placed on Fonterra’s Farm Source website.

Littin told farmers at the group’s annual meeting that unions were doing simple calculations around listed salary, hours worked and days off and posting them on social media.

“It’s painting our industry in a really bad light,” he said.

He urged farmers to take into consideration the total job package and think really hard about how the advertisement was perceived. He reminded the farmers to keep accurate time and wage records to ensure staff never fall under the minimum wage.

Littin said it was too easy for Council of Trade Unions president Helen Kelly to look online at the vacancies and then post any ads that were offering poor or illegal wages on her Twitter account.

Kelly was unapologetic with her stance. Most of the jobs on Farm Source were without remuneration but those that put detail of the jobs in were often paying below the minimum wage for the number of hours worked.

“There are heaps of jobs on there with hours that were far too dangerous and too long,” Kelly said.

These included jobs where workers were expected to work up to 80 hours a week, which Kelly called “crazy”.

“Some of them are paying $11-12 an hour and all I do is tweet them.”

That’s quite smart work by the CTU. A few tweets, and you’re having an impact.

No employer should be advertising jobs for a pay rate below the minimum wage.

However important to note that sometimes a job will come with accommodation, and that is factored into the pay, which may mean the gross rate is higher than that advertised.

Waikato Federated Farmers provincial president Chris Lewis said it was hard to disagree with some of Kelly’s claims made on social media, particularly when some of the ads looking for a manager were only paying $18 an hour.

“If you employ a manager at $18 an hour, don’t whinge to the Feds about the performance. A good manager should be getting $30 an hour.”

Yep.  Pay peanuts, get monkeys.

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The true story is less sensational

May 18th, 2015 at 12:00 pm by David Farrar

Like many I was outraged when I read in the MSM:

A Christchurch school principal is defending contentious material given to pupils labelling women in de facto relationships “cheap prostitutes” and male partners “cowards” for not proposing marriage.

The literature has drawn criticism from the Ministry of Education which says it does not fit with the sexuality education curriculum, while Labour education spokesman Chris Hipkins says it should be withdrawn completely.

The text titled ‘Safe Sex’, produced by the American-based Bible Baptist Publications, came to light after Papanui High School parent Lydia Clark complained to the school when her 15-year-old daughter brought it home from a Year 11 health class.

It included strong Christian views, branding unmarried couples who live together “habitual and irresponsible fornicators”, while “death and hell” awaited those having gay sex.

“She thinks he’s a wonderful man, yet he’s such a coward he can’t even ask her to be his wife. He thinks she’s a fine lady, yet she’s nothing more than a cheap prostitute who allows herself to be used for his sexual gratification in exchange for what seems to be a stable and secure home life,” the material said.

“Either you are married or you are not married. If you are not married, yet you have sexual relations, then you are a wicked fornicator.”

My first reaction was that the school must have rocks in their heads to think this is appropriate, but the full story of how this happened is on Gaynz.com:

After discussion with the school, the mum who complained, Lydia Clark, says the school has since explained the pamphlet was only used in a section on ‘views on sexuality’.

“It was used because the sex ed teacher found it underneath her car window wiper at the local mall car park, and as it was something obviously being pushed in the school’s community she wanted to show it to the children as an extreme view of religious opinion,” she says in a post clarifying the situation on Secular Education Network’s Facebook page.

“Unfortunately where this all went wrong, was she had a planned discussion/critical evaluation to take place as part of this lesson which would have presented this a lot differently than how it came across to my daughter, but she was sick on the day of the lesson and left the pamphlet and ten questions with the reliever teacher, who didn’t do the discussion part. If the discussion had taken place immediately following, I think this would have mitigated the situation a lot.”

This makes a lot of sense. The teacher just using the pamphlet as an example of extreme views, as it was left on her car. It wasn’t the teacher promoting this in school as a legitimate view – just to show what views are out there.

It’s a pity that one has to go to non MSM sites to get the full story.

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Why did the Canterbury Earthquake insurance claims take so long to pay out? Part 2

May 17th, 2015 at 4:25 pm by kiwi in america

Yesterday I covered the first two important issues on this subject. Today I conclude this topic with the last two important issues:

3 – The requirements of the global reinsurers

With NZ contributing a miniscule 0.67% of premiums to the global insurance underwriting pool and yet necessitating one of the top 10 global insurance payouts in the last four decades, you can imagine that the global reinsurers were forced to look very closely at their exposure to the New Zealand market. It became quickly apparent that the already tiny premium pool was even smaller than it should’ve been due to the competitive market pressures mentioned in yesterday’s post. Not only was the premium pool tiny, but there were significant earthquake underwriting problems with the model in NZ.

NZ’s retail F&G insurers only carry between $5 and $10 million of the first portion of a large disaster claim – the rest is reinsured. Just as we pay premiums to retail insurers for the cover we seek carrying a portion of the risk ourselves via the policy excess, so retail insurers do the same. The first $5 million of an insurable event must be covered from the premium pool that the individual insurance company holds internally and above that, a claim is made on their insurance with the re-insurers. The re-insurers in turn charge the retail insurance company re-insurance premiums based on their accessed risk of that insurer’s portfolio of policies. The re-insurers spread the load amongst themselves by only taking a portion of a retail insurers’ risk so NZ insurance companies typically have treaties with a minimum of eight and sometimes up to fifteen re-insurers. The re-insurers in turn spread their risk load through the huge insurance syndicates that trade at Lloyds in London.

With such a massive claims event from such a small country (i.e. one that could take many decades to replenish the cost of the claims from future premiums), the only way a reinsurer could profitably remain doing business in such an earthquake prone country was to find ways to definitively quantify then cap the payouts and do everything legally possible to prevent a massive new round of claims in the event of another major earthquake. Two crucial decisions were taken by a consortium representing the reinsurers with the most exposure to the NZ market – decisions that if they could not be implemented, there were doubts as to whether they would stay in the entire New Zealand F&G insurance market AT ALL. A rushed visit to Brussels by the Insurance Council CEO and Earthquake Minister Gerry Brownlee reassured the reinsurers that NZ was worth keeping in their portfolio. The following two decisions were imposed externally by the reinsurers and would also have a dramatic impact on the claims management process and how long it would take to settle claims:

(i) The event had to finish.
Canterbury quickly became the epicenter of global seismologic research especially given the presence of what were considered new faults (e.g. the Greendale fault causing September 4 and the Port Hills fault causing February 22). Given the interrelated nature of the faults and the stress fracture points from the later quakes being triggered by the earlier sequences AND the huge number of aftershocks (1,500+ over 4 on the Richter scale, 63 over 5 and 6 over 6 – anyone who’s been through just a 4 will tell you it’s quite a good shake), the understandable rationale was: why should we (the reinsurers who are on the hook for the $29 billion of the insurable costs of the rebuild) spend those billions rushing to make repairs only to have a fresh earthquake sequence re-damage the repaired properties. Some of the early cosmetic repair work under the cap done by the EQC in early 2011 had to be redone as a consequence of the June 13 and December 23 sequences. The general reinsurance rule of thumb with serious earthquakes is that six months has to elapse without an aftershock above 5 before any major claim settlements could begin. The gap between quakes 5 or above for each of the five designated earthquake sequences commencing with September 2010 were: 3 months, then 2 months, then 4 months and then 6 months. It wasn’t until May of 2012 (after the December 23rd 2011 quake) that the reinsurers could formally declare the entire event over and begin the proper work of larger claim settlement. The claims ‘meter’ didn’t start running on the major claims in the eyes of the insurers until May 2012.

(ii) Ensuring durable earthquake proof repairs
Understandably the reinsurers did not want to be on the hook for another massive repair bill should Christchurch be struck again. The best way to ensure this would not happen was to make sure that rebuilt/repaired homes in the riskier parts of the city had deep and strong enough foundations done during the rebuild/repair process. Christchurch is a hodge podge of different land types with some areas far more prone to damage than others. It is why the western and northern parts of the city were relatively unscathed (more elevated drier clay laden and gravely soil) versus the east where the ground was closer to the water table, swampier and less stable. The land under suburbs immediately adjacent to the Avon and Heathcote Rivers was so unstable as to comprise the bulk of the residential red zone. In this area, the ground was deemed to be so unstable as to render it uneconomic to mediate possible future damage hence the settlement scheme.

Reinsurer requirements for stable repairs/rebuilds lay behind the re-designation of green zoned land into three subzones: Technical Category or TC1 (grey) being the most stable, TC 2 (yellow) being moderately stable and TC 3 (blue) being deemed the most unstable of land not zoned red. Repairs/rebuilds could commence on TC 1 and 2 designated properties but some 17,000 properties in the green zone were designated TC 3. Insurers would not begin to affect repairs or do a rebuild on properties zoned TC 3 until they knew precisely what type of soil the property was on so they could ensure the new foundations were strong enough to leave the repaired/new dwelling isolated from another large earthquake. This required soil tests to be done on every TC 3 section BEFORE the settlement of the claim could even commence by way of building work. Soil engineers don’t grow on trees and so a huge backlog of required tests built up and added to all the other issues that formed part of the suite of frustrating delays. I know several people in TC 3 hell and their lives have been miserable in their wobbly uneven cold draughty homes. Their plight is wretched and they all can share mind numbingly depressing stories about the massive runarounds their insurer and EQC have given them. It is of little comfort for them to hear that they effectively became the sacrificial lambs to preserve the right of all other kiwis to insure their homes, businesses and vehicles such was the knife edge that global underwriters teetered on in deciding on their continued exposure to the whole NZ insurance market. The protection from future claims inherent in the TC 3 process was the price that needed to be paid to keep the reinsurers in our market.

4 – Miscellaneous issues

Other issues that have impacted negatively on the claims settlement and rebuild process include:
* The Christchurch City Council’s consenting process as the rebuild gathered pace quickly came under massive strain. It was borderline efficient even before the quakes (I know because I built some apartments in 2004 before emigrating to the US). Despite the presence of CERA as a super agency given extraordinary ‘cut the red tape’ powers, the CCC’s consenting time frames and processes became even more bogged down as to impose a serious bottleneck particularly on the nascent commercial rebuild in the CBD. This culminated in the CCC having its consenting powers taken away from it by the NZ wide council consent accrediting agency IANZ and distributed to other councils with a proven track record in greater consenting efficiency.
* Staff shortages – an event of this magnitude was going to test the claims processing capacity of every insurer with exposure in the province. EQC had to increase its claims handling staff fifty-fold and private insurers, swamped with massive caseloads of claims, had to reallocate resources from other offices, bring people out of retirement and hire new staff and restructure their Christchurch claims handling processes to meet the load. This all took time. For a period of time, a raft of inexperienced even incompetent (and occasionally fraudulent) assessors and adjustors were wreaking some havoc with the lower end EQC claims. Millions of dollars were wasted on unnecessary paint jobs and smaller cosmetic repair work approved by the new adjusters rushed into the field but inexperienced with differentiating between earthquake damage and normal wear and tear. It has taken all the insurers, EQC, assessors, QSs, Fletchers’ approved contractors and others years to get up to speed in processing claims of this volume. These delays are common with any major global insurance event but they added on top of the ones unique to New Zealand detailed earlier.

The Christchurch earthquakes have been a massively traumatizing event for most of the population of the city even for those who did not face battles over claims over the cap. The problems of claims management by EQC, the insurers and Fletchers fill social media, blogs and other concerned citizen websites. This post is not to excuse the various mistakes made at various levels but merely to give some big picture context to the problems and to identify the combination of unique factors that have come together in somewhat of a perfect storm in Christchurch. Some could be ameliorated with procedural even legislative changes to the EQC and how it delivers the earthquake cover it offers but some is endemic to the global insurance market and those issues are beyond the ability of EQC, NZ’s biggest retail insurers and even the government to get around. It is hard to listen to the woes of those on the receiving end of all these issues and not be moved by their plight and to be sympathetic to their desire to blame simple scapegoats (EQC, the insurance companies and the government). Such criticism fit neat pithy sound bites so loved by the media. The truth is far more complex and cannot be described in a simple short sound bite hence this post.

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Why did the Canterbury Earthquake insurance claims take so long to pay out? – Part 1

May 16th, 2015 at 4:17 pm by kiwi in america

If you live in Christchurch, visit there regularly or know homeowners there, you will know that this question has consumed enormous emotional bandwidth for the longsuffering residents of the earthquake battered city. There are pressure groups (Red Zone Rebels), websites (www.insurancewatch.org.nz) and various Facebook pages devoted to attacking New Zealand’s retail insurers, the EQC, Fletchers and CERA for the various delays in payouts and a variety of issues to do with the rebuild. A book called “The Christchurch Fiasco” by Sarah Milne is an excoriating attack on insurance companies albeit from a left wing partisan perspective. An entire lengthy post could be devoted to the legitimate shortcomings of both the EQC and retail insurers – this post attempts to detail WHY the delays occurred and points to several factors unique to New Zealand and these earthquakes that have contributed to many of the problems Christchurch residents face. There 3 main factors at play:

1 – The scale of the disaster

This is a matter that almost all people can appreciate. Part of the problem of managing the disaster was the sheer scale of the disaster. Here are some key statistics that put it into some NZ and global context. The total all up cost of the rebuild of Christchurch (and surrounding towns) is estimated at $40 billion. Of this, approximately $30 billion is covered by insurance ($17B private insurers and $13B from EQC) with the remaining costs being mainly infrastructure rebuilds covered by local and central government. In terms of just the combined insurance expected payout, the next largest disaster in NZ was the Edgecombe/Bay of Plenty Earthquake in 1987 that did $271 million worth of damage. In USD$ terms, the combined damage of the five major earthquake events (4 September 2010, 26 December 2010, 22 February 2011, 13 June 2011 and 23 December 2011) makes the Canterbury quakes the 6th largest insurance event GLOBALLY since 1980. The only earthquake to exceed the Christchurch sequence in costliness is the 2011 Japanese quake and tsunami and it is hard to separate what portion of this event was the earthquake or the tsunami rebuild cost. The Northridge/San Francisco quake of 1994 cost about the same as the Canterbury quakes.

The total insured component of the rebuild comprises approximately 12% of the Gross Domestic Product (GDP) of the NZ economy with Treasury estimating the all up cost of the rebuild to top 20% of NZ’s GDP. To give some sense of comparison, the most costly disaster in terms of rebuild costs was Hurricane Katrina in 2005 in Louisiana and Mississippi costing approximately USD$200 million. As costly as it was, it represented only about 0.5% of US GDP. The Kobe quake in Japan in 1996 comprised 4% of Japanese GDP with the 2011 earthquake/tsunami costing 6%. Only the Chilean earthquake of 2010 came close at 10%.

A total of 1,240 commercial buildings were demolished in the Christchurch CBD (about 80% of the stock) and 12,000 residential homes have or will be demolished (8,000 of them comprising the residential red zone). Between Fletchers (the lead repair contractor) and other contractors, over 170,000 homes have been, or are waiting to be, repaired.

2 – NZ’s unique insurance environment

There are a number of features that are unique to New Zealand when it comes to earthquake insurance. The impact of the EQC has been huge. New Zealand’s EQC is unique in the world. There is no other private sector or government sponsored earthquake insurance scheme that offers such widespread affordable cover for earthquakes ($100,000 on residential dwellings and $20,000 for domestic contents) for what was a premium of only 0.15c per $100 of the insured’s Fire and General insurance premiums up to a maximum of $180 per annum. Premiums were a tenth of those currently charged by the California Earthquake Authority, probably the only scheme in the world remotely close to the EQC. Consequently only about 30% of home owners in California have earthquake coverage and with a $500,000 cap, many high value homes would be significantly under insured. NZ’s EQC model has had three significant impacts on the Christchurch earthquake claim settlement process:

(i) Effect of EQC on NZ retail insurer behaviour
By taking the first $100k of earthquake risk, it meant NZ retail Fire and General (F&G) insurance companies effectively had a $100k excess if they offered earthquake insurance cover to full replacement. Since not all homes are destroyed in an earthquake merely damaged, it was likely that, at least for residential homes, the vast majority of claims would be handled by EQC. The presence of such extensive affordable earthquake cover resulted in market behaviour that took NZ earthquake insurance on offer far beyond what other earthquake prone first world countries’ insurers offer. It led to a product war between retail insurers as they out bid each other in terms of the top-up earthquake coverage they offered. I worked for a retail insurer for 7 years from the late 80’s to the mid 90’s. When I first commenced my employment, we would only offer top up earthquake cover from the EQC $100k to the indemnity value of the property included in your dwelling policy. The indemnity value is the depreciated value of the home. If you wanted full replacement earthquake cover, you had to pay an extra premium for the difference. Then we were able to offer full replacement to a specific sum insured for earthquake as part of the policy for no additional premium. Finally, due to competitive pressure, we were offering full replacement for earthquake to full replacement based on the m² of the dwelling (so-called open ended full replacement cover).

The effect of this product bidding war was to leave NZ retail insurers (and their international reinsurers) with a sizable underwriting shortfall from the premiums received for earthquake cover in comparison with the coverage offered. This gap can be best illustrated by the situation faced by AMI Insurance post quakes. By buying a higher than normal percentage of the dwelling and contents insurance market in Christchurch with lower than competitor premiums, once the claims were totaled up and the reinsurance added, the company was insolvent and had to be effectively bailed out by the government who took the Canterbury quake claims portion of AMI into Southern Response, allocated the reinsurance claims amounts taking the whole disaster off their balance sheet effectively recapitalizing AMI and allowing it to continue to trade unencumbered by the quake claims.

(ii) International insurable percentage comparisons
The extensive and cheap cover offered by EQC meant a significantly higher percentage of properties in NZ were covered for earthquakes. This was not only in terms of the percentage of properties that actually had earthquake cover but the percentage of each properties’ replacement value that was covered for earthquake damage. Munich Re (one of the world’s largest reinsurers) calculated that fully 75% of the Canterbury earthquakes’ losses were insured. This figure is distorted by the various Category C and D commercial buildings that could only be insured for indemnity value which, for say a 70 year old un-modernised building, meant effectively its land value only. The affordability and accessibility of residential dwelling earthquake cover in NZ meant that a whopping 97% of homes in Christchurch were insured for earthquake most technically for full replacement. To give you a sense of what a massive global outlier this is compared to other 1st world countries’ earthquake claims: for the 1994 Northridge, California earthquake, only 35% of the losses were insured. The percentage was a measly 19% for the 1996 Kobe quake in Japan.  Thus the presence of EQC created a massively greater per capita insurable event than was possible in any other country.

(iii) Legal interface and apportionment issues
The presence of EQC has resulted in yet another unintended consequence – that of the confused and blurred legal boundaries between its cover and that offered above the EQC $100k by private insurers. Of all the problems that have arisen with claims in Christchurch, this one has had the most severe and debilitating impact. The confusion began with the very first quake in September 2010. The EQC and private F&G insurers all have their own policies, procedures and interpretations. Whilst the private sector insurers differed somewhat from each other, most of the differences lay in the wording of their respective policy documents.

The real friction and problems arose from so-called ‘over the cap’ claims or claims where repairs or rebuild costs were likely to be above the $100,000 ceiling of an EQC claim. Private insurers would not take responsibility for any claim at or below $100,000. What happens when there are differing views as to what the repair/rebuild costs would be? The EQC has a vested interest in the costs being greater so that some of the burden of restoring the property as per its policy provisions is shared with the private insurers and the private insurers had a vested interest in making sure as few claims as possible were over the cap and thus exclusively the responsibility of the EQC. The highest percentage of the residential rebuild cost is tied up in the homes that were either destroyed or the most damaged. There are 4,000 homes in Christchurch not in the residential red zone that were completely destroyed and thus not covered by the government’s buyout scheme – and some 25% of the red zone home owners opted to take only the GV on the land payout leaving their insurer to cover the rebuild cost on a new section elsewhere in the city. Tens of thousands more homes required more than $100,000 to repair them. When there was a difference of opinion over the true cost of repair, agreement had to be reached as to who would manage the claim via a complex process known as the ‘Joint Review’. Each side hired Assessors then Quantity Surveyors and Contractors and then sometimes lawyers were needed to determine this with each step of assessment taking months leaving hapless policyholders in a hellish insurance ‘no man’s land’.

Had the EQC scheme been a behind-the-scenes wholesale provider of just the first $100k of earthquake cover who would have only dealt with the retail insurers effectively as their under the cap earthquake re-insurer, policyholders would’ve had only one entity (their retail insurer) to deal with. Had the legal boundaries between the two insurers been more clearly spelled out in legislation, it would’ve spared millions of wasted man hours and likely more millions in needless litigation costs borne by policyholders forcing the courts to define these boundaries. Sadly, it took a major earthquake to properly test these boundaries – boundaries that were never really tested in prior events where EQC claims were made.

Deciding on what to do with over-the-cap claims was further complicated by the issue of apportionment; i.e. which of the five officially EQC designated separate earthquake events was responsible for what damage. With assessors and QSs already overloaded with the sheer volume of claims, this apportionment added to delays in assessing claims because each event was subject to the $100k cap and it took until a landmark High Court case in September 2011 for the EQC to accept this and then begin negotiating with the retail insurers on a case by case basis as to who paid for what.

Part 2 tomorrow covers: The requirements of the global reinsurers and Miscellaneous issues

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Even been to Paraparaumu?

May 16th, 2015 at 10:00 am by David Farrar

The Herald reports:

A religious spat has broken out between two neighbours in rural Auckland after one erected a 6.4m statue of the Hindu god Shiva.

Ravin Chand told the Herald on Sunday that he installed the 30-tonne religious effigy so that he and his family could pray to it.

But neighbour Bryce Watts, a Catholic, said the marble statue was “bizarre” and “offensive”.

“Religiously and culturally it’s a bit insensitive to us and I can’t believe they’re able to do this. Part of our property looks at it and it’s part of a religion we don’t agree with,” he said.

In Paraparaumu there is a 14 metre statue of the Virgin Mary on a hill, which most of Paraparaumu can see. That’s no more (or less) offensive than a statue of Shiva.

People have the right to worship whatever God they want. They don’t have the right to stop their neighbours putting up a state of their God, on their land – even if it is of a different God. That’s what we call freedom of religion.

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OECD homicide rates

May 16th, 2015 at 7:00 am by David Farrar

The Herald reported:

One-in-five murder victims around the world is Brazilian, Colombian or Venezuelan, a study has shown, despite the three countries containing less than four per cent of the world’s total population.

Click here to see the interactive map

The Homicide Monitor data project compiled by the Brazil-based Instituto Igarape reveals the high rates of homicide around Latin America and the Caribbean, where a third of all of the world’s homicides occur.

The region contains only eight per cent of the world’s total population.

Honduras (85.5 murders per 100,000 inhabitants), Venezuela (53.7) and the US Virgin Islands (46.9) have the highest murder rates per population in the world.

By contrast, New Zealand’s homicide rate is 0.9 per 100,000 population (as of 2012), while Australia’s is 1.1.

And:

But owing to Brazil and Colombia’s largest overall population, these two countries – along with Venezeula – are responsible for one-in-five of all murders in the world each year.

Wow. That is huge.

So how does NZ compare with other (non-micro) OECD countries. The rates per 100,000 from lowest to highest is:

  1. Luxembourg 0.2
  2. Denmark 0.3
  3. Iceland 0.3
  4. UK 0.3
  5. Japan 0.3
  6. Austria 0.4
  7. Slovenia 0.4
  8. Germany 0.5
  9. Australia 0.8
  10. Switzerland 0.5
  11. France 0.6
  12. Norway 0.6
  13. Spain 0.6
  14. Italy 0.7
  15. Sweden 0.7
  16. Ireland 0.8
  17. Czech Republic 0.8
  18. New Zealand 0.9
  19. Poland 0.9
  20. Netherlands 0.9
  21. South Korea 1.1
  22. Portugal 1.1
  23. Belgium 1.1
  24. Slovak Republic 1.2
  25. Hungary 1.3
  26. Finland 1.4
  27. Canada 1.5
  28. Greece 1.6
  29. Israel 2.3
  30. Chile 4.4
  31. Estonia 4.8
  32. USA 5.2
  33. Mexico 23.4

So NZ is around middle of the pack. We had 41 murders last year. To match the best OECD countries, that needs to reduce to 15 or so.

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50th Otago Foreign Policy School

May 15th, 2015 at 3:00 pm by David Farrar

The 50th Otago Foreign Policy School is on from Friday 26 to Sunday 28 June.

A must attend for foreign policy wonks. Some of the speakers and topics are:

  • Mr Colin Keating – ‘New Zealand’s election to the UN Security Council in October 2014: How was it accomplished and what does it mean?’
  • Professor Jacqui True (Monash University) – ‘The Globalisation of the Human Security Norm: New Zealand Leadership and Followership in the World’
  • Ms Lucy Duncan, Group Manager, Strategy and Governance Group, Ministry of Foreign Affairs and Trade (MFAT), Wellington – ‘The Role of the New Zealand Diplomat: Past, Present and Future’.
  • Professor Hugh White (ANU) – ‘Old Friends in a new Asia: Australia, New Zealand and the Rise of China’
  • Dr Joe Burton (Victoria University of Wellington) – ‘New Zealand-US Relations and the Obama Administration’s Pivot to Asia’
  • Dr Anna Powles, Massey University – ‘New Zealand’s Foreign and Defence Policy in the Pacific: Shifting Regional Geopolitics and the Risk of Diminishing Relevance’
  • Dr Adrian Macey, Senior Associate (Institute for Governance and Policy Studies, Victoria University of Wellington) – ‘The Environment and Foreign Policy: New Zealand’s Climate Change Diplomacy’
  • Professor David MacDonald (Guelph) – ‘Exporting Aotearoa New Zealand’s Biculturalism: Lessons for Aboriginal-Settler Relations in Canada’
  • Mr Terence O’Brien, (Victoria University of Wellington) – ‘National Identity and New Zealand Foreign Policy’
  • Dr James Rolfe (Centre for Strategic Studies, Victoria University of Wellington) ‘Intelligence, Accountability and New Zealand’s National Security’
  • Dr Paul Buchanan, Director (36th Parallel Consultancy) – ‘Foreign Policy Realignment and Institutional Lag: the case of the New Zealand intelligence community’

 

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Wellington cut off

May 14th, 2015 at 2:02 pm by David Farrar

Wellington is now cut off due to the rain, with SH1 and SH2 closed and all train lines also closed.

At this point in time I’d like to remind everyone that the Greens are against Transmission Gully. Their policy I presume would be everyone should walk home!

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