The need for unity in Auckland

May 1st, 2016 at 4:00 pm by David Farrar

Bernard Orsman writes:

Auckland’s political right is fragmented and facing failure in the Super City elections, warns former mayor John Banks.

Vic Crone, John Palino and Mark Thomas are splitting the centre-right vote for the mayoralty while a new National Party-backed Auckland Future ticket has emerged – to run a separate campaign from its long-established Communities & Residents (C&R) stablemate.

Banks, who has tasted victory and defeat at Auckland local body elections, says it is impossible for the centre-right to win the mayoralty with three mayoral candidates.

“The centre-right needs to sit down and clearly identify a candidate of preferred choice. There is simply not enough momentum from the centre-right to overcome the fight between the three candidates.

“[Labour MP] Phil Goff is getting some serious momentum that is going to be difficult to catch,” Banks says.

I agree that a three way split between centre-right candidates will hand Goff the Mayoralty on the plate.

At some stage no doubt a media organisation will conduct a poll in Auckland. My suggestion would be that any candidate under say 10% drops out, as you have no chance of winning if you’re in single figures at this stage.

Wellington Airport submits consent application for runway extension

May 1st, 2016 at 2:00 pm by David Farrar

Stuff reports:

Wellington Airport has submitted resource consent applications to extend its runway, which could allow long haul flights to land in the capital.

Planners sent the application, which is more than 5000 pages long, to the Wellington City Council and the Greater Wellington Regional Council on Thursday afternoon.

The councils will now check the application to see whether additional information is required. According to the airport, the application could be publicly notified by June.

The airport wants the application to be heard by the Environment Court as soon as possible. That could potentially clear the way for construction starting in 2018.

Wellington Airport is 66 per cent owned by NZX-listed infrastructure company Infratil, with the balance owned by the Wellington City Council.

I’m all for extending the runway. But the vast majority of the cost should be borne by the owners of the airport, in approximate proportion to their share-holdings.

The application seeks permission to extend the runway by 354 metres. Funding for the project, which is estimated to cost $300 million, has not been secured, with the airport indicating it wants financial input both from local, regional and central government.

So far the National Government has said it is “unlikely” that it would contribute funds towards the project, with Economic Development Minister Steven Joyce questioning why a subsidy is needed, given Infratil’s profitability.

There is only a case for a Government contribution if they are convinced that having a longer runway in Wellington will lead to more people deciding to visit New Zealand. I can’t imagine there is a single person out there who will decide to come to NZ because they could now fly direct to Wellington. Maybe a few public servants in Australia?

Labour third in Scotland

May 1st, 2016 at 12:00 pm by David Farrar

The Guardian reports:

Scottish Labour’s manifesto launch setting out plans to heavily tax the rich has been overshadowed by a poll suggesting Labour could come third behind the Tories in Scottish elections for the first time in more than a century.

Kezia Dugdale, the Scottish Labour leader, said her party’s plan to raise income tax to 50p for the wealthiest earners represented the “big choice” facing voters on 5 May, and she claimed the Scottish National party would need to make cuts of £3bn.

Maybe NZ Labour will advocate a 50% tax rate also?

An Ipsos Mori poll for STV found that the Scottish Conservatives were two points ahead of Labour in the regional vote to select 56 MSPs, and one point behind in the constituency vote to chose 73 directly elected members.

Echoing other polls putting the two parties neck and neck, Ipsos Mori’s projections suggest the Tories would take 23 seats and Labour 20 – the latter 17 seats down on its tally in 2011.

Labour behing the Tories in Scotland is almost unthinkable. That would be like Labour being behind National in the Maori seats in NZ.

Yes elections are a distraction – but a good one

May 1st, 2016 at 10:00 am by David Farrar

Stuff reports:

Things are going so well for Opotiki, the district’s mayor claims they don’t need an election.

Mayor John Forbes has suggested Opotiki not take part in local body elections, although when asked if that should be for voters to decide, he said “democracy is incredibly important”.

Forbes said the elections risked distracting the council during a critical phase in the district’s development. Adding, elections often meant important work was placed on the back-burner. 

“I strongly believe in democracy, I think it’s really, really important,” Forbes said. “But there’s also an old adage: If something isn’t broke don’t fix it, and the council’s functioning very well.”

John Key probably thinks the Government is functioning very well also, but he doesn’t advocate no elections as they are a distraction.

He said the councillors were doing a “good job”, and if they weren’t he wouldn’t be suggesting an unopposed election.

“I’ve got a council working really well, so lets just carry on working hard on what’s good for our district.

“If I didn’t think we were doing that, I would say we [council] should all put our hands up, either stand down or ask the community to elect again.”

Forbes believed a council being re-elected unopposed had not happened anywhere else in New Zealand.

“I can’t think of any other councils who would want to do what I’m suggesting here. But we’re a small community, who know our council very well.

“When I talk to other mayors from around the country, a lot of them would like some change on their councils. A lot of mayors stand down because they feel they have had enough or not as good at the job as someone else might be.

It’s good the Mayor is so pleased with his Council. That is rare. Also good that they think things are going so well. But their perspective may not be shared by all – hence the point of elections.

General Debate 1 May 2016

May 1st, 2016 at 8:00 am by Kokila Patel

Anti-Trump protester uses pepper spray on young kids

May 1st, 2016 at 7:39 am by David Farrar reports:

FIVE people, including two little girls, were pepper-sprayed during a heated clash between Trump demonstrators in California on Tuesday.

Backers waving US flags and pro-Trump signs were met by opponents leading to a shouting match between about 50 people outside City Hall in the Orange County community.

At one point, an opponent unleashed a handheld pepper-spray device on the pro-Trump crowd.

Five people, including two girls ages eight and 11, were exposed to the eye-stinging spray, police Sgt. Daron Wyatt said. Three were treated at the scene by paramedics.

How disgusting.  No doubt the person is against Donald Trump because he is not as kind and caring as the activist who thinks pepper spraying five year olds is freedom of speech.

No tag for this post.

Bells may backfire

April 30th, 2016 at 4:00 pm by David Farrar

Stuff reports:

It works for cats and it works for cows, so should cyclists also be required to have a bell so you can hear them coming?

That could soon be the case in Wellington, after the city council proposed changing its rules to “strongly encourage” every cyclist to have a bell for warning pedestrians when they are about to whizz past.

I’m not sure this is a great idea.

If a cyclist does not have a bell and they are coming up behind pedestrians, then the onus is on them to slow down and only pass in a safe manner.

If they have a bell, they may think that all they have to do is ring it, and the onus is on the pedestrians to get out of their way.

$50 billion for submarines for Australia

April 30th, 2016 at 2:00 pm by David Farrar

CNN reports:

Australia has ordered 12 new submarines at a cost of $39 billion, becoming the latest nation to upgrade its fleet in a region where the seas are getting crowded.

French defense contractor DCNS beat competitors from Japan and Germany to the massive contract, which Australia described as the “largest and most complex” in its history.

Australia said the new 4,700-tonne Shortfin Barracudas will offer superior sensor performance and stealth characteristics, while maintaining the range and endurance of previous models.

That’s a huge purchase. A$50 billion. That would be the equivalent of NZ spending around $10 billion on our navy.

Little in Iraq

April 30th, 2016 at 12:00 pm by David Farrar

Stuff reports:

Labour leader Andrew Little has ended a secret trip to Iraq where he says he wanted to see first hand the work of Kiwi troops.

The invitation to visit troops at Iraq’s Camp Taji was issued by Defence Minister Gerry Brownlee, after Labour opposed the deployment.

Little’s trip was not announced till after he and Brownlee returned to Dubai on Thursday.

Little says he accepted the invitation to go because it was important to see for himself the work Kiwi troops were doing and the conditions they were working under.

The Opposition leader also met Iraqi Defence Minister Khaled Al-Obedih and senior military officials from the Coalition forces in Iraq.

Good of the Government to invite Little to go, and good that he attended. In the unlikely possibility he becomes PM, he will have to decide on future deployments.

“Labour opposed the deployment because the Iraqi Army’s track record was poor, even after years of training by American and other armies.

“The situation in Iraq, as well as Syria, remains hugely challenging and it is not yet certain how the Iraqi security forces will address issues of motivation and discipline, and continuing ethno-sectarian divisions across the whole army.

“It’s obvious the needs Iraq has won’t be met in the two year period the Government set for the mission. The Government must now be open with the public about the demands being made of it and its plans.”

Labour opposed the deployment, but their reason for doing so has been proven invalid. The Iraqi Army is now winning battles and the training has been cited as a major factor.

Brownlee, who was on his second visit to Taji, said the Kiwi taskforce had trained more than 4000 Iraqi troops since being deployed alongside Australian troops in 2015.

National MP Mark Mitchell also accompanied the group.

“I thought it was important to offer the Leader of the Opposition an opportunity to see Task Group Taji in action for himself, and for Mr Mitchell, as the relevant select committee chair, to have first-hand experience of the mission.”

Task group Taji provides a range of training to the Iraqi Security Forces.

“This training includes basic weapons handling, counter IED, combat first aid, obstacle breaching techniques, planning for combat operations, the laws of armed conflict and human rights.

“It was pleasing to hear from senior Iraqi commanders that Task Group Taji-trained troops have on a number of occasions captured and held towns and territory from D’aesh using their newly attained skills.”These commanders speak highly of the training and intend to cycle units back through Taji for further training when possible.”

Over the last year Islamic State has lost significant territory.

Little will now visit the Zaatari Refugee Camp, where 80,000 refugees fleeing the conflict in Syria are now based.

“New Zealand has had a history of supporting humanitarian causes. We believe the Government must double the refugee quota and that we should be stepping up support for the people who are suffering in these camps,” Andrew Little said.

Labour often says we should treat causes, not symptoms. The misery of the refugees is being caused by Islamic State. If Islamic State is not defeated, the number of refugees will continue to increase massively. So why does Labour say NZ should help refugees, yet opposes doing anything to reduce the number of refugees?

Hilary Barry quits TV3

April 30th, 2016 at 10:00 am by David Farrar

The Herald reports:

One of TV3’s biggest and most popular stars, newsreader Hilary Barry, has quit the network.

Her departure is the second high-profile casualty at TV3 in the past year after John Campbell left in May when his show Campbell Live was dumped.

The Weekend Herald can reveal Ms Barry, who has been with the company since 1993, resigned on Thursday. There is speculation she is headed to rival broadcaster TVNZ.

This is a huge loss for TV3. Barry is pretty much their most well known face. They’ve lost many other top presenters and journalists also. It is hard to see how they turn around their decline.

General Debate 30 April 2016

April 30th, 2016 at 8:00 am by Kokila Patel

Ken Livingstone claims Hitler was a zionist!

April 30th, 2016 at 7:23 am by David Farrar

The Guardian reports:

Jeremy Corbyn has been forced to suspend his close ally Ken Livingstone for making inflammatory remarks about Hitler and Zionism, after facing a revolt among Labour MPs about antisemitism within the party.

With just a week to go before crucial elections, Labour was engulfed in a row over Livingstone’s future and wider concerns that a series of scandals involving antisemitism was damaging its reputation.

It was the second time in two days that Labour has had to take action over complaints of antisemitism. The Bradford West MP Naz Shah was suspended over Facebook posts from 2014, including one suggesting Israelis be deported to the US.

In defending Shah, Livingstone intensified the row by claiming Hitler had supported Zionism “before he went mad and ended up killing 6 million Jews”

Linking Zionism to Hitler – only in the UK Labour Party.

Mad Ken Livingstone can’t tell the difference between forced deportations and voluntary migration. It’s like claiming Islamic State is pro-immigration as they have created so many refugees.

A Darwin nominee?

April 29th, 2016 at 3:00 pm by David Farrar

Stuff reports:

A US mother has been shot by her toddler while driving on a highway in Wisconsin.

The two-year-old boy was in the back seat when he accidentally fired the weapon, reported NY Daily News.

His mother, identified by WISN-TV to be 26-year-old Patrice Price, was struck in the back and found unresponsive at the wheel, the Milwaukee County Sheriff’s Office said.

Medical officials began CPR but she was pronounced dead at the scene.

“Initial witness accounts indicate that a child in the back seat of the vehicle got a hold of a gun and discharged the firearm, sending a single bullet into the driver’s back,” the office sheriff’s office said in a statement.

Putting a two year old in a back seat of a car with a loaded gun surely qualifies for a Darwin Award?

Pity the landlords

April 29th, 2016 at 2:00 pm by David Farrar

Stuff reports:

Bad tenants are being unfairly let off the hook for property damage after a court decision, landlords say. 

The Court of Appeal ruled last week that tenants who caused a fire by leaving oil unattended on a stove in 2009 could not be held financially liable.

The Residential Tenancies Act states tenants can be made to pay for damage caused by neglect or carelessness. The Property Law Act says they are not liable for damage from “perils” beyond their control such as fire, storm, earthquake or volcanic eruption.

Leaving oil unattended on a stove seems pretty careless to me.

Landlords and property managers say that while last week’s appeal court decision may have been fair, the ruling opens the floodgates for tenants being excused for severe negligence and deliberate damage.

One Christchurch property manager, who did not want his business identified for fear of jeopardising live Tenancy Tribunal claims, said they had lost two applications in the last few days seeking orders for tenants to pay landlords’ insurance excesses after damage.

The harm included carpets covered in drink stains and cigarette burns, damaged walls, and ignored plumbing leaks which led to water damage, he said.  

“The Tenancy Tribunal said they had made their ruling because of the Appeal Court ruling. They definitely used that as an excuse to exonerate tenants for any damage,” the property manager said.

So what is the possible impact:

The property manager said the rulings would lead to higher insurance premiums pushing up rents, or landlords excluding risky tenants such as families with children. Insurance companies could also insist landlords take only insured tenants, he said.

“The good tenants will have to pay the price for what the bad ones do”.

Requiring tenants to be insured could well be the outcome.

Aussies support Clark over Rudd

April 29th, 2016 at 1:00 pm by David Farrar

Stuff reports:

Twice as many Australians support Helen Clark to lead the United Nations than Kevin Rudd.

And even Labor voters prefer the former Kiwi prime minister to Rudd, a poll has found.

The Essential poll, released on Wednesday, indicates that Australia’s two-time former prime minister would no longer muster the widespread public support that characterised the “Kevin 07” election campaign and kept his leadership ambitions alive against Julia Gillard after being dumped by his party in 2010. …

The Essential poll found 45 per cent of 1020 people surveyed thought Clark would be a better leader for the UN, with just 21 per cent opting for Rudd.

Wow, that will hurt Rudd. His own country prefers Clark to him y a massive margin.

A good result for Team Helen.

Almost half of Britons pay no income tax

April 29th, 2016 at 12:00 pm by David Farrar

The Telegraph reports:

Almost half of Britons pay no income tax while the richest are now shouldering the biggest burden on record, a new analysis has found.

The Institute for Fiscal Studies said that the proportion of working-age adults who do not pay income tax has risen from 34.3 per cent to 43.8 per cent, equivalent to 30million people. 

Over the same period the amount of income tax paid by the richest 1 per cent has risen from 24.4 per cent to 27.5 per cent, meaning that 300,000 people pay more than a quarter of the nation’s income tax.

It is much the same here. Almost half the households pay less in income tax than they get in direct payments such as benefits or child/family tax credits.

Trotter calls for coalition of the left

April 29th, 2016 at 11:00 am by David Farrar

Chris Trotter writes:

The bitter truth is that if a beneficent angel were to uplift the best politicians from Labour, the Alliance (before it disappeared) the Greens and the Mana Party, and drop them into a divinely crafted political entity that might – or might not – continue to exploit the still potent Labour brand, then the Government of John Key would be in real trouble. The current Labour Party bleats on (and on, and on, and on) about being a “Broad Church”, but the sad truth remains that its reservoir of recruitment has never been shallower.

A genuinely “broad church” party of the Left would balance off Andrew Little with Hone Harawira, Jacinda Ardern with Laila Harré, Stuart Nash with John Minto, Kelvin Davis with Annette Sykes, Grant Robertson with Julie Anne Genter and Annette King with Metira Turei. The whole spectrum of alternative power: from Soft Centrists to Hard Leftists; would be covered.

While I have serious doubts about the electoral appeal of such a group, Trotter has a point that Labour is attracting relatively few denizens of the left.

That Labour’s fatal apostasy [the abandonment or renunciation of a religious or political belief or principle] has rendered such a divinely appointed caucus little more than a pipe dream is the besetting tragedy of progressive New Zealand politics. Its embrace of neoliberalism in the mid-1980s left Labour with the political equivalent of syphilis. Sadly, every one of the many attempts to administer the Penicillin of genuine progressivism (God bless you Jim, Rod, Laila!) was rejected. Consequently, Labour’s bones have crumbled and its brain has rotted. Small wonder that the other opposition parties are reluctant to get too close!

They’re at 27% in the average of the polls, which is 6% worse than three years ago.


The Antipodes email

April 29th, 2016 at 10:00 am by David Farrar

The Herald reports:

John Key’s personal lawyer cited a conversation with the Prime Minister when lobbying a Minister about a potential crackdown on the lucrative foreign trust industry.

Ken Whitney, the executive director of boutique trust specialist Antipodes, wrote to then-Minister for Revenue Todd McClay on December 3, 2014, over concerns Inland Revenue were sizing up the sector.

“We are concerned that there appears to be a sudden change of view by the IRD in respect of their previous support for the industry. I have spoken to the Prime Minister about this and he advised that the Government has no plans to change the status of the foreign trust regime,” Mr Whitney wrote in an email.

“The PM asked me to contact you to arrange a meeting at your convenience with a small group of industry leaders who are keen to engage to explain how the regime works and the benefits to NZ of an industry which has been painstakingly built up over the last 25 years or so.” …

Mr Whitney denied any conflict of interest between his role working for John Key and lobbying the government, or any preferential treatment from Ministers.

“As you can imagine, naturally, I do speak to the PM from time to time on personal business. So I just used the opportunity to bring it up, to inquire – and who we should we talk to. And his response was ‘Minister McClay,'” he told the Herald.

Mr Key said there was nothing unusual or inappropriate about Mr Whitney raising the issue with him or referring to the discussion with the Prime Minister in his letter to Mr McClay.

“No, because that happens all the time. There’s nothing unusual about it. People ask me about particular issues. I don’t live in a vacuum. I do what is absolutely the correct thing to do, which is send them off to the minister. There’s nothing I wouldn’t have done on a million of other occasions which was to direct them to the minister and let the ministers get on to do their work.”

Mr Key said his talk with Mr Whitney followed a story which said Inland Revenue was changing its approach to foreign trusts – a report Key said was inaccurate.

“There was a story in the Herald, he asked me about it, I said to go and see the minister. After that I never had any involvement. I didn’t even know what he’d done. I just knew there weren’t any changes as far as I knew.”

The Prime Minister’s Office stressed he was not involved in any subsequent discussion about reviewing the foreign trust industry.

While the substance of the story might be trivial (PM referred his lawyer to the appropriate Minister), the perception is pretty horrible. It gives the opposition an avenue to tie the PM in.

I think this makes it more likely there will be law or policy changes, as the Government won’t want to be seen to be doing nothing.

Having said that it is still far from obvious to me that there is anything wrong on the NZ side. NZ shares all information on trusts with other countries so long as we have a tax agreement with them. The problem is a few countries like Panama have chosen not to have one.

Classification Office gets it right

April 29th, 2016 at 9:00 am by David Farrar

Stuff reports:

Three of Wicked Campers’ most offensive vehicles have been banned from New Zealand’s roads, following a landmark ruling.

In a ruling from the Classification Office – the first time it has made a decision about a vehicle –  the organisation ruled that slogans on three of the controversial Australian company’s vehicles qualify were “objectionable publications”.

The ruling means that the vans are banned from public places in New Zealand with immediate effect, and Wicked could face a fine of up to $200,000 per offence if it continued to use them.

The banned vehicles depict a cartoon of the Cat in the Hat with drug paraphernalia, Snow White about to snort cocaine and Shaggy and Scooby Doo about to smoke marijuana.

I was worried that the Classification Office might get too enthusiastic and use their powers to ban slogans which are sexist. That would be a step too far. Yes they are offensive and I support the efforts of campgrounds and the like to say vehicles with them are not welcome on their private property.  But banning sexist slogans on vans would be like banning offensive t-shirt slogans.

But by only banning the three designs showing children’s characters doing illegal drugs, the Classification Office has not gone too far.

In its ruling, the Classification Office says the “size and colourful nature” of the images on the vans – including a depiction of Snow White using cocaine – means they would attract the attention of children and young teenagers.

Drug use as promoted on the vans would have “serious short and long term harmful impacts on the psychological and physical health of children”, the ruling said.

While there was “a certain tolerance” for the depiction of drug use in films and DVDs, their viewing could be controlled, while the Wicked vans “cannot be easily covered, or displayed only in restricted areas or to select persons”.

The Classification Office said it considered an R16 classification, but it would have been too difficult to enforce for a vehicle.

“The classification of these campervans as objectionable removes all doubt as to their unsuitability for their intended purpose.”

So far so good, but …

It would now consider a number of other vans submitted by police for classification.

It will be interesting to see if any others are banned.

General Debate 29 April 2016

April 29th, 2016 at 8:00 am by Kokila Patel

Misinformation from Worksafe

April 29th, 2016 at 7:00 am by David Farrar

Stuff reports:

Worksafe NZ has been accused of “grossly exaggerating” workplace injuries and fatalities in a major television advertising campaign.

But the Crown agency is sticking by its “Home Time” campaign, indicating it uses a definition that classes “severe injuries” as much more common than “serious” ones.

Most people would regard severe and serious as very similiar terms. If anything you’d think severe is worse than serious.

Worksafe’s campaign contains a statement from Griffins Foods chief executive Alison Barrass that “last year more than 23,000 people were severely injured or killed in New Zealand workplaces”.

By linking it to killed, it makes you think these are injuries just short of death. Maybe lose a limb, or be off work for months.

But Statistics NZ data indicated only 450 people were killed or seriously injured at work in 2014, said Ian Harrison, principal of Wellington economics consultant Tailgate Economics.

450 vs 23,000!

Harrison, who previously worked for the Reserve Bank and World Bank, has filed a complaint with the Advertising Standards Authority, describing the advertisements as “deceptive”.

Figures published by Worksafe NZ on its own website indicated there were 44 workplace fatalities in the year to April 2015 and 3384 “serious harm notices”.

So the Worksafe ad uses a figure 50 times larger than Stats NZ and seven times larger than their own website.

It defined a severe injury as a work-related claim that required more than seven days off work, while a serious injury involved hospitalisation and a higher risk of death, he said. 

So severe is a week off work. I doubt most people would think of that as servere.

Harrison believed people were likely to be misled by that.

“The viewer is being led to believe that tens of thousands are ‘not coming home’ each year because of death or serious injury.

I’m with Harrison. This is not a good start for Worksafe.

His report is here. It will be interesting to see the decision of the ASA.

UPDATE: Worksafe responds:

WorkSafe New Zealand’s Home Time advertisement states that “last year more than 23-thousand people were severely injured or killed in New Zealand workplaces.” That is completely correct.

The 23,000 figure relates to ACC data for severe injuries, which require more than 7 days off work. Severe injuries can include everything from falls from height to being hit by moving objects. Not only does that mean that thousands of New Zealanders suffered severe work-related injuries it also represents a huge loss of productivity.

‘Severe injuries’ is one of the three official measures that are used to track progress towards the Government’s target of reducing workplace injuries by 25 per cent by 2020 (along with fatalities and serious injuries).

Tailrisk Economics has focused on the ‘serious injury’ measure as if it is the only valid measure. It is not.

The Home Time advertisement sets out the case for New Zealand needing to do a better job at keeping people health and safe at work – and WorkSafe stands by that 100 per cent.


  • Severe injuries are defined as work-related injury claims that require more than a week off work (and excludes what are called ‘gradual process injuries’).

  • Serious injuries are defined as hospitalisations with a higher chance of death.

  • Tailrisk Economics is wrong when it suggests the Home Time advertisement refers to 23,000 deaths and serious injuries. As explained above, the 23,000 figure relates to severe injuries and deaths.

Cruz picks Fiorina as VP candidate

April 28th, 2016 at 4:00 pm by David Farrar

A smart pick by Ted Cruz. If he gets the nomination (which is unlikely) this will help in the general in two ways:

  1. Voters are guaranteed a historic first either way – either the first female VP or the first female President
  2. Fiorina can attack Clinton more aggressively than Cruz can, without being called sexist etc

Her business record would be more of an issue if she was the presidential candidate, but I don’t think it will be an issue as VP.

I actually said a few months ago I think she’d be a good VP choice.

But of course it is more likely Trump will be the nominee. Will be interesting which poor sucker he picks to be his VP candidate. He has said it will not be an outsider like him, but someone with political experience.

A hipster tax to fund Tieke recovery

April 28th, 2016 at 3:00 pm by David Farrar

Eric Crampton writes:

It is very, very easy to break a beautiful tax system. Here is the recipe for doing it.

Start by finding some product that seems a little frivolous – a bit of a luxury – and preferably one that’s mostly used by people that the typical voter does not really like anyway. Say, for example, the fancy beard oil used by hipsters to maintain their elegant facial appendages.

Then, find some cause that nobody could object to. Something really motherhood and feijoa pie. Tieke recovery. Who doesn’t love the New Zealand saddleback and support its recovery? Nobody.

Add the two together and propose a tax on hipster beard oil to help fund Tieke recovery programmes. Who could object? Hipsters are at best a mild nuisance, and at worst a looming threat to national identity; beard oil seems the height of frivolous consumption; and Tieke are a perennial entry in Bird of the Year competitions.

The bundle is an economic abomination. If Tieke recovery is the best use of the next public dollar, it is best regardless of whether we tax hipsters’ beard oil. And if a tax on hipsters’ beard oil is the most efficient next tax to impose, then the government should tax it regardless of whether the money raised is used to cut other taxes, fund Tieke recovery, or fund something else entirely.

Many countries have a tax system where hundreds or thousands of different products have different tax rates applied to them. I’m glad we don’t in NZ, and hope we don’t change.

My starting point for anyone advocating a new tax, is that they should identify an existing tax to eliminate or reduce so that overall tax levels on families and businesses doesn’t increase.

Huntly to stay open until 2022

April 28th, 2016 at 2:00 pm by David Farrar

Scoop reports:

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they’d be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up.

The Auckland-based power company has signed a ‘swaption’ contract with Meridian Energy “and other market participants”, according to a statement from Meridian chief executive Mark Binns. Meridian, but no detail of the trigger price for firing up Huntly has been given and there is no indication of how much of up to 150 Megawatts of additional capacity is committed to Meridian versus other generators.

Meridian only owns wind and hydro power stations and appears to have led the charge to pay to have the two 250 megawatt Huntly ‘Rankine’ units on standby for any periods of low inflows to hydro lakes that could compromise security of electricity supply. The contract will make up to 100MW available year-round and an additional 50MW in the winter months, from April to the end of October.

The move will disappoint environmental campaigners seeking less fossil fuel use in the New Zealand electricity system, which is roughly 80 percent renewable at present, with a target of 90 percent renewable by 2025.

By 2025 it is likely Huntly will have closed anyway. The decisions on individual power stations are for the company directors. It is not a decision for Government. The Government has correctly placed a charge on greenhouse gas emissions, so that coal costs more than previously. But if Genesis has decided it is more profitable to keep it open for now, that is fine. The price they pay for emissions through the ETS will help pay for offsets such as forestry. That is why an ETS is a good market response, rather than central Government decision making.

Energy Minister Simon Bridges said the move was a “pragmatic” and “transitional” measure, while the national grid operator Transpower also welcomed the decision.

“There were times in 2019 that we forecast a shortfall of energy, which could have been difficult to manage,” said chief executive Alison Andrew in a statement. “In extreme cases (for example a dry year when the hydro lakes are very low), we could have experienced a situation where consumers would have been asked to conserve their power usage.”

Basically without Huntly there would have been risks of power shortages. As more generation comes online, Huntly won’t be needed eventually.

MPs expenses Q1 2016

April 28th, 2016 at 1:00 pm by David Farrar

The quarterly disclosure is out. The highest expenses for non-Ministers is:

  1. Andrew Little $36,009
  2. Kelvin Davis $24,016
  3. Nuk Korako $23,984
  4. Metiria Turei $23,011
  5. Kanwaljit Snigh Bakshi $21,350
  6. David Carter $21,027
  7. Jacqui Dean $20,749
  8. David Cunliffe $20,613
  9. Stuart Smith $20,406
  10. Meka Whaitiri $20,357
  11. Clayton Cosgrove $20,296
  12. Nanaia Mahuta $20,157

For Ministers (domestic travel) the top are:

  1. John Key $41,886
  2. Te Ururoa Flavell $38,941
  3. Steven Joyce $35,807