A smoke free waterfront

May 19th, 2015 at 2:15 pm by David Farrar

Stuff reports:

Smoking a cigarette while enjoying a beer outside one of Wellington’s waterfront bars could soon become a thing of the past.

A proposal to make the waterfront and Civic Square smokefree will be brought before Wellington City Council on Wednesday night, after the Public Health Association called on the council to show leadership on the matter.

If successful, the smoking ban could be in place by the end of the year.

But the owner of waterfront bar St Johns has condemned the move as discriminatory against smokers and businesses, and says if smoking is to be banned in one place, it should be banned everywhere.

Will it reduce smoking, or will it just mean smokers go to other bars?

The ban on smoking inside bars worked because it applied to every bar, and the justification was that staff and other patrons were being exposed to second hand smoke. I love the fact that I can now go to a bar and not be exposed to smoke. But this isn’t about protecting people from passive smoking.

But Trinity Group director Jeremy Smith, whose businesses include St Johns, called the move  “crazy” and “discriminatory”.

Smoke was not a problem on the waterfront, as outdoor areas were large and smoke was swiftly blown away. It was unfair to drive away people who chose to partake in a legal activity, he said.

I agree with Jeremy Smith. There are some bars whose outdoor areas are unpleasant as they are largely enclosed, and stink of smoke. But waterfront bars do not have that issue – I’ve never ever been affected by smoke in the outdoor areas of waterfront bars – because they are so open and large.

If a ban was to be introduced, it should be city-wide. “It’s just another nail in the bar/restaurant coffin in terms of driving people away from areas where they can socialise.”

It is unfair to have it apply to only those bars.

Asked what the impact on smokers at waterfront bars would be, Lester said: “They won’t be able to smoke.

“It’s a benefit, it’s a privilege, to operate a business down there … I don’t think it’s a big ask.”

A privilege? Don’t they pay rents and rates? Isn’t being able to operate a business a right, not a privilege someone gives you?

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The Press against increasing the size of Council

May 19th, 2015 at 1:30 pm by David Farrar

The Press editorial:

The suggestion that Christchurch residents support  more councillors is rather surprising.  There has been no hint of it in public debate recently. The last time the number of councillors was reviewed six years ago there was no hint of dissatisfaction with the council’s size and that review passed virtually unnoticed. …

There is no doubt that the governance decisions councillors must make in the rebuild are of fundamental importance and require close attention. But councillors are well paid for their work and it is far from clear that increasing the numbers will improve the decision making. Indeed, studies on board governance suggest that the council is somewhere near an optimum level for efficiency and performance. To take an obvious if not quite exact parallel, the boards of giant companies making billion-dollar decisions are rarely much larger.

 Any suggestion of a council increase will have to go to public consultation. Ratepayers are unlikely to support it. What they want is sound and efficient decision-making, not a handful more decision-makers.

The Council struggles to make sound decisions with 13 Councillors. Going to 19 will only make the problem worse.

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Parliament 19 May 2015

May 19th, 2015 at 12:25 pm by David Farrar

The order paper is here.

Oral Questions 2.00 pm – 3.00 pm

  1. CHRIS BISHOP to the Minister of Finance: How will Budget 2015 progress the Government’s commitment to manage the Government’s finances, while delivering better public services?
  2. ANDREW LITTLE to the Prime Minister: Does he stand by his statement that there is no housing crisis in Auckland in light of the fact the average Auckland house price has risen by $100,000 in the past year and the Reserve Bank says this is “increasing the risk of financial instability”?
  3. Rt Hon WINSTON PETERS to the Prime Minister: Does he stand by all his statements?
  4. GRANT ROBERTSON to the Minister of Finance: Does he stand by his statement that “we believe the strong underlying economy and responsible fiscal management can deliver a surplus when the final Government accounts are published next October”?
  5. SARAH DOWIE to the Minister for ACC: What indicative reductions to ACC levies are signalled in Budget 2015?
  6. METIRIA TUREI to the Prime Minister: Does he stand by all his statements?
  7. Hon ANNETTE KING to the Minister for Social Development:How much in real terms has Government funding for Relationships Aotearoa changed since 2008?
  8. JONO NAYLOR to the Minister for Economic Development: What progress is the Government making in developing New Zealand’s ICT sector?
  9. Dr RUSSEL NORMAN to the Minister for Climate Change Issues: What is the range of potential costs to the Government resulting from New Zealand’s current forecast for increasing net greenhouse gas emissions for the period 2021-2030, as reported in the Treasury’s climate change briefing dated 6 October 2014?
  10. BRETT HUDSON to the Minister for Building and Housing: What changes is the Government proposing to ensure New Zealand is more resilient to the significant risks we face from earthquakes?
  11. Rt Hon WINSTON PETERS to the Prime Minister: Does he stand by all his statements?
  12. JACINDA ARDERN to the Minister for Social Development: Does she stand by her statement that “it’s a priority for this term of Government that all New Zealanders benefit from the growing economy with a focus on children who are living in hardship”?

National: Four patsies on Budget 2015, ACC levies, ICT and earthquakes

Labour: Four questions on Auckland housing, surplus, Relationships Aotearoa and child poverty

Greens: Two questions on Pm standing by his statements and climate change

NZ First: Two questions, both being does the PM stand by all his statements

 Government Bills 3.00 pm to 6.00 pm and 7.30 pm to 10.00 pm

Environmental Reporting Bill – second reading continued

The bill provides for independent environmental reports in the areas of air, climate and atmosphere, freshwater, marine and land.

  • Introduced February 2014
  • 1st reading: March 2014, passed 78 to 41 with Labour and NZ First opposed
  • Select Committee report: March 2015, supported with amendments by the majority, minority views by Labour and Greens

The second reading debate has 4 speeches remaining of up to 10 minutes, so a maximum debate of 40 minutes.

Reserves and Other Lands Disposal Bill – second reading

The bill makes a number of changes to the status of parcels of land, land titles, and previous Reserves and Other Lands Disposal Acts.

  • Introduced: July 2008
  • 1st reading: March 2009, passed 113 to 9 with only Greens opposed
  • Select Committee report: September 2009, supported unanimously with amendments

The second reading debate has 12 speeches of up to 10 minutes, so a maximum debate of two hours.

Standards and Accreditation Bill – second reading

The bill amends and consolidates the law relating to standards and conformity assessment bodies “to ensure the New Zealand Standards and conformance system is viable, well-functioning, and meets the needs of business, regulators, and consumers into the foreseeable future.”

  • Introduced: July 2014
  • 1st reading: November 2014, passed unanimously
  • SC report: March 2015, supported with amendments with a minority report from Labour

Radio New Zealand Amendment Bill – second reading

The bill amends the Radio New Zealand Act 1995 to implement a new Radio New Zealand Charter

  • Introduced: June 2009
  • 1st reading: June 2009, passed unanimously
  • SC report: December 2009, supported without amendments with a minority report from Labour
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Banks case thrown out

May 19th, 2015 at 11:40 am by David Farrar

The Herald reports:

The case against John Banks has been thrown out and he will not face a second trial for allegedly filing a false electoral return.

The Court of Appeal has sensationally reversed its previous decision to order a retrial following the late disclosure of a document, which Mr Banks’ lawyer David Jones QC said “contradicts all evidence given at trial” by the Dotcom witnesses and made the prosecution “untenable”.

In a judgment just released by the Court of Appeal, Justices Ellen France, Forrest Miller and John Wild ruled that Mr Banks should not stand trial again and he was acquitted.

Extremely pleased for John Banks, and huge questions to answer for Crown Law whom with-held critical evidence from the defence team, and hence the Court of Appeal.

The trial largely hinged on the credibility of who was right about a contentious lunch at the Dotcom mansion. Banks was convicted but his wife Amanda later unearthed new witnesses who corroborated their version of events, so the Court of Appeal quashed the conviction and ordered a retrial. However, in response to the evidence of the new witnesses, Dotcom said there was now two lunches – but this was not disclosed ahead of the appeal hearing.

Well done Amanda Banks for exposing the Dotcom evidence as false.

It is worth noting that while John Banks has been acquitted, his behaviour with the donations was not best practice. He should have shown more interest in the documents he was signing. But there is a difference between poor practice and breaking the law, and he has been acquitted.

UPDATE: The Herald now has the judgment. Extracts:

This court possesses an implied jurisdiction to recall judgments delivered in its criminal jurisdiction, where it must act to prevent a miscarriage of justice that has resulted from some serious error or process. This jurisdiction is reserved for exceptional cases.

What they have done is very rare.

We hold rather that the Crown could not both withhold the memorandum and resist the appeal in the manner that it did. The effect was to mislead the court.

Ouch. Bad Crown Law.

We are satisfied that had we known of the Butler memorandum, we would not have ordered a retrial.

I presume John Banks will now seek costs against the Crown.

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KiwiSaver for kids?

May 19th, 2015 at 11:15 am by David Farrar

The Greens announced:

The Green Party will deliver Kiwi kids a more financially secure future, while reducing inequality, by introducing a national savings scheme for all New Zealand children.

The Green Party announced a pre-Budget savings policy today, called Kids’ KiwiSaver, which will provide all newborns a kick-start deposit of $1,000, on-going top-up contributions, and matching savings incentives to assist families to save for their children’s future.

With careful saving, most children could reasonably build a nest egg of $12,900 by the age of 18 that they can then use for either tertiary education, a deposit on a first home, or roll over into an adult KiwiSaver account for their retirement. The scheme was fully costed by Infometrics and will cost $224 million over the first three years of operation.

The initial cost is not what is important, but the full annual cost once implemented. This is $248 million a year. That has to be funded, which means increasing taxation, or not spending the money elsewhere.

Is giving 18 year olds a “free” $13,000 they haven’t earned the best use of taxpayer money?

The full benefits of this policy would only be reached in 2037, during which time $1.4 billion net present value would have been spent. Would we get a better return investing that instead in better schools?

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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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Easton on FPP

May 19th, 2015 at 9:45 am by David Farrar

Brian Easton writes at Pundit:

You may have been surprised at the outcome of the recent British elections, but New Zealand’s experience shows you should not have been surprised that you were surprised …

In about one in three elections under FR/FPP outcomes were markedly eccentric (space has meant leaving out some of the nuances) where parliamentary outcomes did not reflect voters’ wishes (even ignoring the Non-Vote Party). The effect was especially strong when there was a significant third party support reflecting that the populace’s opinions could no longer be treated as simply being on a left-right spectrum.

The surprise then is not that New Zealand switched to an alternative voting system but that it took so long to do so.

The May 2015 British election underscores the same lesson. Labour’s share of votes rose 1.5 percentage points, more than the Conservative’s 0.8 percent;, but it lost 26 seats while the Conservatives gained 24. At the specific level one can explain this by the complexity of the other third of voters switching between a multitude of minor parties. Conservatives got 36.9 percent of the vote, Labour 30.4 percent.*

As I watched the run-up to the election I wondered how anyone could predict the election outcome with confidence. I was not surprised the outcome was surprising.

Brian is right that FPP elections are difficult to forecast in terms of outcomes. However apart from the uneven seat allocations, the polls did still get it wrong by saying Labour and Conservatives were neck and neck when in fact the Conservatives got 6.5% more.

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Tiger Woods

May 19th, 2015 at 9:00 am by David Farrar

The Daily Mail reports:

When Tiger Woods and Lindsey Vonn split over a week ago, the Olympic skiier posted on Facebook the explanation that ‘both lead incredibly hectic lives that force us to spend a majority of our time apart.’

Daily Mail Online can now exclusively reveal that during one of those ‘times apart’ Tiger cheated on Lindsey – with a ‘faceless, nameless woman’, a friend reveals.

Who is surprised? He cheated on his wife with over a dozen women. His 45 day therapy programme doesn’t seem to done the job!

But the news does remind me of this interview John Key did in 2008:

OH: Who are your heroes and role models?

JK: Bill Clinton and Tiger Woods.

Heh, with hindsight perhaps not the best two choices. Of course he was referring to their success in the two areas he is passionate about – politics and golf.

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Quote of the week

May 19th, 2015 at 8:00 am by TaxpayersUnion

“Prosperity is the real way to balance our budget. By lowering tax rates, by increasing jobs and income, we can expand tax revenues and finally bring our budget into balance.”

– John F. Kennedy

The is brought to you by the New Zealand Taxpayers’ Union. To support the Union’s campaign for lower taxes and less government waste, click here.

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General Debate 19 May 2015

May 19th, 2015 at 8:00 am by Kokila Patel
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Labour blames Govt for an NGO’s expenditure problems

May 19th, 2015 at 7:00 am by David Farrar

Grant Robertson has exclaimed:

The National Government has big questions to answer about how a provider of services to thousands of vulnerable New Zealanders is set to fold, Labour’s Finance spokesperson Grant Robertson says.

Relationships Aotearoa which provides support and counselling to families, individuals and survivors of domestic violence is set to shut its doors, minus any last minute intervention.

“There are thousands of vulnerable people and families who rely on Relationships Aotearoa for critical services. The government cannot leave them in the lurch.

“Like other non-governmental organisations, Relationships Aotearoa has been seriously underfunded in recent years. It has been asked to do more with less and the strain has clearly started to tell.

This is typical Labour. If an NGO has financial issues, then the answer is the taxpayer must throw more money at them. In the same breath they expect us to believe they would ever have lowered the deficit.

Let’s take a look at the latest accounts for this NGO:

  • Income of $9.8 million – mainly from the Government
  • Expenditure of $10.3 million
  • Central expenditure has doubled in one year from $984k to $1,957k
  • Equity of $1.5 million
  • Cash in bank of $3 million
  • Central salaries doubled from $551k to $1,065k

So the obvious conclusion from all this is it is all the fault of the Government – yeah right.

Does Labour ever find an issue, where the answer isn’t tax people more and spend more.

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Back Benches 20 May 2015

May 18th, 2015 at 7:47 pm by Kokila Patel

PRIME TV’s “BACK BENCHES” IS BACK!!!!!: Watch Wallace Chapman, Damian Christie, the Back Benches Panel and special guests discuss the week’s hottest topics!

BUDGET 2015:  Budget Day is nearly here. As always-there are winners and losers in the yearly lolly scramble. But if the budget was strictly up to you-what would be on your wish list?

A HOUSE & A QUARTER ACRE:  The kiwi dream-a house on a quarter acre. It is quickly becoming a daydream for many, particularly for those in Auckland? What can we do to make this dream a reality? Is it a Capital Gains Tax full stop or a tax targeting house flippers? Is it regional development? Is the solution to move to Tauranga or Timaru? Is buying a house-the end all be all? Should we be renters instead?

There are two ways to get in on the political pub action:
First, you can join the live audience in Wellington’s iconic Backbencher Pub on Wednesday, 20th of May at 6pm. Filming begins around6:15pm.

Or watch us that night on PRIME TV at 10:40pm!
http://www.primetv.co.nz/

Plus, Follow us on Facebook (BackBenchesTV) or on Twitter @BackBenchesTV.

Our Panel: Green Party Co-Leader Metiria Turei, Labour MP Stuart Nash, National MP Judith Collins, and United Future Leader Peter Dunne.

” This show is shaping up to be essential election year viewing ” – Paul Casserly, NZ Herald 3/6/14

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The importance of brands

May 18th, 2015 at 4:00 pm by David Farrar

Oliver Hartwich from the NZ Initiative writes:

One of the greatest advances of civilisation is also one of the least obvious: branded products.

We take brands for granted because they are everywhere. People do not just drive any car but a Holden, a Ford or a Ferrari. For fast food lovers, there is a world of difference between McDonald’s, KFC and Burger King. Fashion aficionados care about labels as much as techies do about smartphone brands.

The reason we care about brands is because they provide orientation in markets. People trading with each other have spontaneously found out how useful brands are in this process.

Part of the usefulness of brands is that they signal a certain quality. They become worthless if their products do not deliver. As they say in marketing, “nothing kills a bad product faster than good advertising”.

For companies, a brand is not just nice to have, but one of their biggest assets. Brands take a long time to build because they contain everything that consumers associate with a product. This is why Apple’s brand, for example, is now estimated to be worth $US118.9bn.

In a world of complex markets with millions of buyers, sellers and products, brands provide orientation. This is what brands contribute to civilisation. Imagine a world without them and how much more difficult it would be to navigate.

Unfortunately, this dystopian vision is where we are heading. When plain-packaging rules for tobacco products were introduced, the justification was to promote health goals. Fair enough, but these could have been achieved in different ways as well. The negative side effect of plain-packaging, however, was the precedent it set for other product classes.

In Australia, packaging and labelling limitations on pharmaceuticals are being discussed. If implemented, logos for pharmaceuticals would disappear, making it harder for consumers to pick their preferred painkillers. Meanwhile, confectionary producer Mars has voiced its fear that soon Mars, Snickers and Twix could meet the same fate. Who knows what will be next?

The International Trademark Association has expressed its concerns over the increasing reach of plain packaging rules for different classes of products. They rightly see them as an interference with property rights and warn of the detrimental effects on competition.

I would go beyond that. By limiting companies’ ability to brand their products, we are taking a backwards step on civilisation.

This is one of the best summaries I’ve seen of the dangers of having plain packaging as a precedent. You can be in favour of increased tobacco control measures, but against plain packaging due to the very bad precedent it sets.

I would support plain packaging for tobacco if it could be proven to work and guaranteed it would not create a precedent for other industries. But we know it will. Almost every tobacco control measure has now been endorsed or promoted for other industries such as alcohol, food, soft drinks, pharmaceuticals etc etc.

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More benefits from welfare reforms

May 18th, 2015 at 3:00 pm by David Farrar

Anne Tolley has released the latest report on the welfare system. Lots of good news:

  • 38,000 fewer people on welfare than three years ago
  • 42,000 fewer children in benefit dependent households over three years
  • A halving of young mothers on welfare since 2009
  • The average time a teen parent spends on welfare has reduced from 19 years to 17.5 years
  • Total long-term liability has dropped $7.5 billion or 10%
  • A reduction in total time on main benefits by 1.2 years for sole parents and 2.8 years for youth beneficiaries

The key is reducing the teenagers going onto welfare, as history shows us they then tend to spend most of their working life on welfare.

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A very good analysis by a Labour candidate on The Standard

May 18th, 2015 at 2:00 pm by David Farrar

It is not often I refer people to a really good article on The Standard, let alone one by a Labour candidate, but Deborah Russell has done an easy to read analysis of the Government’s tax changes around property.

She doesn’t say whether it is a good or a bad thing – just calmly explains what the change is, how it will work, what impact it is likely to have, and whether or not it can be regarded as a capital gains tax.

One extract:

So what difference will it make? Very little in terms of tax revenue. I imagine that most property speculators will simply elect to hold onto their properties for at least 731 days, thereby avoiding paying tax on their capital gains. The real effect will be to slow down the property market in Auckland, and elsewhere. It will knock the top edge off the market, winding it back just a little bit. Together with the Reserve Bank’s new rules about the deposits that Auckland property buyers must have, the heat may be taken out of the property market. There will still be pressure due to inwards migration, but frantic speculation in property should calm down.

So why use a tax measure at all, if it’s not going to raise any revenue? And heaven knows that the government must be looking for every possible tax dollar it can find.

It’s a preventative measure, not a revenue raiser. Back when we had a gift duty in New Zealand, there was never very much gift duty raised. Instead, the threat of gift duty meant that people didn’t try to avoid income tax by gifting away assets that earned income. So they couldn’t engage in all sorts of elaborate tax schemes, or if they did choose to do so, there was a price to pay. Most people elected not to engage in the elaborate schemes, and so very little gift duty was ever collected. It was a very effective tax measure.

Likewise, this measure should be very effective in shutting short term speculation down. I suspect that once the two years is up, plenty of properties will end up on the market, but very few properties will be sold under the two year mark, and so very little tax revenue will be collected.

I always enjoy an insightful analysis, regardless of medium or author.

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This is deliberate

May 18th, 2015 at 1:00 pm by David Farrar

Stuff reports:

Pensions have risen by $67 a week in the last five years –  while the incomes of parents of childre

n born into low income and beneficiary households have fallen further and further behind.

The gap is poised to grow even larger as the country enters a long period of low inflation because while pensions are pegged to average wage rises, benefits are linked to living costs, or the CPI.

The latest round of benefit adjustments painted a stark picture of the growing disparity. Pensions increased 2.07 per cent, or $11.60 a week for a married couple, in line with wage rises. But other benefit rates rose by only 0.51 percent.

This is deliberate. Benefits are tied to inflation so they remain static in real terms. NZ Super has a floor tied to the average wage, to maintain relativity to working income.

The reason is because retiring from employment and going onto NZ Super is meant to be permanent.  While going on a benefit should generally be temporary. You don’t want people remaining on welfare for an extended period of time. Making benefits more generous reduces the gap between work and welfare.

Analysis of household data by Stuff.co.nz shows Government payments to over-65s have eclipsed those of any other age group, sparking harsh criticism the Government prioritised elderly over the young, which make up nearly half of New Zealands lowest earners.  

This has been the policy of all Governments in the last 20 years or so. NZ Super is linked to wages, and other benefits linked to inflation.

If you linked all benefits to the average wage, it would have costed tens of billions of dollars and many more people would be on welfare.

I actually think having NZ Super linked to the average wage will become unaffordable in the long term. As more and more NZers are aged over 65, we won’t have enough working NZers to support a universal wage linked pension. I’d propose that it be also linked to inflation – but say CPI + 1% – this would mean it always grows in real terms, but becomes more affordable.

In 2010 the Government adopted a policy change, to index superannuation with the average wage, while benefits remained driven by inflation. GST rose to 15 per cent that year, and tax cuts were not applied to benefits. 

No. Wrong. This has been policy for 15 years. In 2010 that policy was put into statute, but the policy has applied since the 1990s.

Labour Party finance spokesman Grant Robertson said while the elderly had been looked after, Government policy meant younger generations would not reach retirement with the same level of savings or income base.

“If you look at the 2010 tax cuts, they very specifically protected the incomes of the elderly, and that’s good that they did that.

“But at the same time they completely failed, and in fact went in the opposite direction, for people on main benefits. They took a policy decision to deliberately exclude those on main benefits from having their incomes protected, so to me that is definitely to the detriment of other age groups.”

Also wrong. The main benefits being inflation adjusted were fully compensated for the increase in GST.

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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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Almost everything Robertson asks for is being done!

May 18th, 2015 at 11:00 am by David Farrar

The Herald has a Budget wishlist from Grant Robertson. What is interesting in there is the total lack of new ideas – in fact 90% of what he calls for is already occurring! Let’s go through them.

What was required was an active policy of targeted financial investment stronger innovation partnerships,

Has he not heard of the Callaghan Institute? The invested $270 million in innovation partnerships in 2014.

encouragement of migration to the regions

You already gain extra points to qualify as a migrant if your job offer is outside Auckland, and the Government has said it is looking at more points on top of that.

and research and development through tax credits to all qualifying companies rather than the grants system that operates now.

This is the one actual difference. It’s not a huge difference whether you encourage R&D through grants or tax credits. One problem with tax credits is it means companies just reclassify expenditure to qualify.

Mr Robertson also said the Budget should focus on making housing affordable for all New Zealanders.

While the Reserve Banks was dealing with the issue of housing demand, “the Government cannot outsource housing policy to them.”

Which the Government announced on Sunday – in contrast to Labour which now has no policy at all on the demand side.

Mr Robertson said he also wanted to see moves in the Budget to diversity the economy away from the reliance on dairy

This is a myth the left love to push.  However if you look at the contribution to GDP, dairy is quite modest at around 4%. And the Stats NZ data series (SNE048AA ) shows the dairy proportion (dairy farming and dairy manufacturing) to be:

  • 2008 3.9%
  • 2009 4.0%
  • 2010 3.1%
  • 2011 3.9%
  • 2012 4.2% (last year available)

So no big change over time.

and it should invest more in education and training to prepare for “a new economy”.

Vote Education (including Tertiary) has increased by $2.378 billion since the 2008 budget and will no doubt increase more in the 2015 budget.

So basically everything Grant demanded the Government do, it has been doing – with the exception of changing R&D grants to R&D tax credits. They really have no policy or ideas.

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UK Labour’s civil war

May 18th, 2015 at 10:00 am by David Farrar

Stuff reports:

Britain’s Labour party being ripped apart as an epic struggle for its soul threatens to destroy its election hopes for a generation.

Jim Murphy, a respected and moderate Blairite, left his colleagues stunned and distraught by quitting on Saturday as Scottish Labour Leader after a “poisonous” war with the party’s biggest trade union paymasters.

In parting remarks, he warned that it would be “the kiss of death” if Labour caved in to the demands of hard-Left union barons such as Len McCluskey, the general secretary of Unite, who backed Ed Miliband as Labour leader.

The unions in the UK got Ed Miliband made leader, just as the NZ unions did the same with Andrew Little. Both Ed Miliband and Andrew Little lost the members vote and the caucus vote, but got elected due to the union vote.

Murphy warned that McCluskey must not be allowed to choose the next leader of the party.

In NZ, three faceless EPMU delegates made Andrew Little the leader.

Murphy’s decision came a day after Chuka Umunna, a leading moderniser, withdrew from the contest to succeed Miliband as leader.

David Cameron will be relieved. Umunna was the ones they feared could reach out to aspiration centrist voters.

Moderate Labour figures believe the time has come for a decisive shift away from union dominance of the party’s politics. Blairites are privately dismayed that 147 of the 232 Labour MPs elected are Unite members, or received donations from the union.

Owned, lock stock and barrel.

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NZ Initiative on charities

May 18th, 2015 at 9:00 am by David Farrar

Stuff reports:

Big charities are claiming income tax exemptions while small non-profits struggle to gain official charity status under the current rules, a new report says.

The New Zealand Initiative’s latest report, titled Giving Charities a Helping Hand, calls for the Government to provide greater transparency in the charity sector, set clearer rules and processes, and remove the “unfair” tax advantages enjoyed by the for-profit arms of charity groups. 

The business lobby group analysed 12 years of regulatory change to find the current legislation allowed the commercial arms of large charities to claim income tax exemptions with little oversight into how much money was passed on for charitable purposes.

At the same time, smaller operators were struggling to achieve or keep registered their charity status, threatening the important work they did in New Zealand communities, report author Jason Krupp said. 

“With about $16 billion flowing into charities a year, it is absolutely necessary to have effective regulation in place to maintain the public’s trust in the sector,” he said.

“Unfortunately, we appear to have set the regulatory bar too high in some places.”

The current law is inconsistent with some small charities struggling to get registered, while large trading companies are registered.

The same legislation allowed large charities with commercial arms to keep their earnings within the business tax free, regardless of how much of the profits were distributed to charities or what the charities did with the funds.

Such companies included food giant Sanitarium, Ngai Tahu’s 38 limited liability companies (which included Shotover Jet and Whale Watch Kaikoura), private schools, and private hospitals like St George’s Hospital in Christchurch. 

“We’re not saying religious and cultural groups can’t be charitable but we need a levelling of the playing field,” Krupp said.

He wanted the Government to “rebalance” the charity sector by reviewing the Charities Act and the definition of charitable purpose. 

I’d like to see it reviewed. I do not think the advancement of religion should be a charitable purpose. There is no benefit to society in having groups promote a belief in a supreme being or beings. Many religions do a lot of very good charitable work, and would still qualify for charitable status. But it should be based on what they do, now on promoting a belief system.

Who should promoting evolution or jihadism (both tenents in holy books) be a charitable purpose, but promoting science is not?

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General Debate 18 May 2015

May 18th, 2015 at 8:00 am by Kokila Patel
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New bright line test for capital gains on housing

May 18th, 2015 at 7:00 am by David Farrar

John Key announced:

“People calling for a new capital gains tax often overlook the fact that under existing rules, anyone buying property with the intention of selling for a gain is liable for tax on that gain,” Mr Key told the National Party’s Lower North Island regional conference in Lower Hutt today.

Mr Key confirmed the Budget this week will contain several measures to bolster tax rules on property transactions and to help Inland Revenue enforce them.

Introducing a new “bright line” test to tax gains from residential property sold within two years of purchase, unless it’s the seller’s main home, inherited or transferred in a relationship property settlement.

This isn’t a major change, but a useful one. Intentions are very hard to prove, so a bright line test will make enforcement easier. It is hard to think of many times that you’d sell a secondary home within two years of buying it, unless it is to make a capital gain.

Requiring non-residents and New Zealanders buying and selling any property other than their main home to provide a New Zealand IRD number.

This may also give us some better data on what proportion of houses are foreign owned, plus of course allow any gains by non-residents to be taxed,

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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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Social Impact Bonds

May 17th, 2015 at 4:00 pm by David Farrar

Stuff reports:

Treasury should set up a special unit to lead private companies looking to make a return on social services, a new report says.

Social impact bonds are becoming more frequent in the United States and the United Kingdom, but have yet to be tested in New Zealand. 

They involve private and non-profit organisations partnering with the Government to fund and deliver services to improve social outcomes.

If the contracts achieve agreed results, investors get paid back their investment plus a return.  

Sounds worthwhile and a win-win.

Right-wing think-tank The New Zealand Initiative has released a report analysing overseas examples and looking at the application of social bonds in New Zealand. 

One of the authors, Dr Bryce Wilkinson, said they could have a real impact here.

“There’s been widespread concern about the extent of certain social problems, and there’s a feeling New Zealand could and should be doing better.

“There’s real hope that in the right set of circumstances, there’s considerable gains to be made,” he said.

But those circumstances were limited. Areas in which the bonds might be applied included reducing prison recidivism, lowering the number of children needing to go into state care and helping keep truancy rates down. 

So if an organisation managed to reduce the truancy rate in an area, then investors get back a return on their investment.

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Unions can’t get past ideology

May 17th, 2015 at 2:00 pm by David Farrar

The Press reports:

Unions are pushing for the Christchurch City Council to renegotiate its Cost Share Agreement with the Crown in a last ditch bid to stop assets being sold off.

They’re saying they want hard working taxpayers in Oamaru and Hamilton to hand over money to the Christchurch Council. Taxpayers have been very generous with Christchurch, and have poured billions in. But an agreement is an agreement. The Christchurch Council has to live within its means.

The Rail and Maritime Transport Union told the council it was vehemently opposed to the proposed asset sales and viewed it as matter of life and death.

“In our experience the privatisation of publicly owned assets that are operated as businesses leads to a deterioration of health and safety standards and increased risk of serious harm and death. This was our experience during the privatisation of the rail industry in New Zealand,” spokesman John Kerr said.

Lyttelton Port had an unhappy recent history of deaths and serious harm injuries on the waterfront and its inland port. The union did not wish the situation to be made worse by a sell-off of the port and would fight to stop any sale.

Their ideology blinds them. Council owned ports such as Lyttelton have far far worse safety records than privately owned ports such as Tauranga.

Relative injury rate statistics at all the Ports throughout New Zealand. Supplied by Worksafe New Zealand BTG 31Oct14 -

Relative injury rate statistics at all the Ports throughout New Zealand.
Supplied by Worksafe New Zealand
BTG 31Oct14 –

This graph is from the Bay of Plenty Times. The most unsafe ports are Timaru, Wellington, Dunedin and Lyttelton. Wellington’s port is 100% Council owned. Port Otago is 100% Council owned.

The Port with the largest private shareholding (45%) is Tauranga. Bluff has 34% private.  Timaru has 28% private.

There is no evidence at all that having some private share-holding makes you unsafe.

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