Herald on revealing CVs

March 11th, 2014 at 2:00 pm by David Farrar

The Herald editorial:

The law is not always an ass but it can produce an absurdity. The decision of the Human Rights Review Tribunal to make a company disclose to a failed job applicant the CVs and reference checks of others going for a job is an example.

The aggrieved party complained to the tribunal that he was discriminated against on the basis of age. He wants to see the credentials of others who applied or succeeded in the process. Under the court system’s rules of “discovery”, which the tribunal adopts, all information pertinent to an action needs to be handed over from the defendant to the plaintiff. The tribunal has dismissed an application from the company involved, Alpine Energy, to block that discovery under a section of the Evidence Act which covers confidentiality.

So Alpine and its recruitment agency must give the man the information it has on the successful candidate and those who contested and lost. This would include not only names, applications and CVs (although the tribunal and the failed job-seeker have agreed it need not include addresses and contact details) but also reference and perhaps security checks.

A pretty appalling decision. You apply in confidence for a job. Revealing that you applied could endanger your current job. Also very unappealing forcing a company to justify why it didn’t employ someone. Employment decisions are often somewhat subjective – how well they interviewed, whether or not they would fit into the team culture, whether their CV had typos in it etc.

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The Press on Labour

March 4th, 2014 at 1:00 pm by David Farrar

The Press editorial:

Labour leader David Cunliffe perhaps scored one or two electoral points last week when he visited – in her damaged home – an 85-year-old widow who told him she had been “pushed from pillar to post” in her dealings with EQC. …

Unfortunately, it was no substitute for a cohesive and well-articulated earthquake recovery policy from Labour, which continues to look lacklustre when it comes to explaining how it would handle the rebuild.

Cunliffe followed up his photo opportunity with a pledge to set up, if elected to Government, a $2 million fund to help individuals bring test cases against EQC and insurance companies, to “clarify the law, remove blockages and help get things moving”.

There is an immediate perception problem with the amount, which seems almost insignificant given the scale of the problem.

While Cunliffe talks of millions, the Government in election year is bound to keep repeating its mantra that it is funding $15 billion of a $40b rebuild.

Cunliffe’s rhetoric almost invites critique. If elected to Government, it would be better for Labour to clarify the law itself, even if that involves seeking its own declaratory judgments from the courts, rather than relying on citizens bringing test cases.

Paying people to take EQC and insurance companies to court might also create blockages, rather than remove them, at least in the cases of those who become involved in litigation.

It seems to be one of their more stupid policies. We’ll pay people to take our own insurance company to court.

And, given the length of time such cases take to be heard and adjudicated, then potentially appealed, it is hard to imagine how this scheme will help to get things moving to any significant degree.

A great way to delay things. Will they fund cases all the way to the Supreme Court?

It would be inviting them, in some cases, to sue EQC, a government department. What Cunliffe is saying, essentially, is that “if elected to govern, we will give you some money so that you can take our own officials to court, so that they can have a better idea of how they should be handling your case file”.

This is not what electors are looking for in a credible opposition party campaigning in election year.

It sounds like a policy a 22 year old staffer dreamt up the day before the visit. The key word in the editorial is credible. The policy is not credible, and neither is the party promoting it.

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Views on McCarten

February 28th, 2014 at 10:00 am by David Farrar

Chris Trotter writes:

The New Zealand Left suddenly finds itself in the position of the dog who caught the car. For years, slagging off the Labour Party as a bunch of neoliberal sell-outs has been one of the Left’s favourite pub and parlour games. But now, with one of this country’s most effective left-wing campaigners just one door down from the Leader of the Labour Opposition, the Left, like the bewildered pooch for whom the fun was always in the chase, has finally got what it wanted and must decide what to do with it.

Yes, it is a huge victory for the far left.

If Cunliffe and McCarten are allowed to fail, the Right of the Labour Party and their fellow travellers in the broader labour movement (all the people who worked so hard to prevent Cunliffe rising to the leadership) will say:

 “Well, you got your wish. You elected a leader pledged to take Labour to the Left. And just look what happened. Middle New Zealand ran screaming into the arms of John Key and Labour ended up with a Party Vote even more pitiful than National’s in 2002! So don’t you dare try peddling that ‘If we build a left-wing Labour Party they will come’ line ever again! You did – and they didn’t.”
Be in no doubt that this will happen – just as it did in the years after the British Labour Party’s crushing defeat in the general election of 1983. The Labour Right called Labour’s socialist manifesto “the longest suicide note in history” and the long-march towards Blairism and the re-writing of Clause Four began.
Not sure comparison to Michael Foot are helpful to Labour.
The Dom Post:

So the dinosaurs are back. Richard Prebble returns to run ACT’s election campaign. Matt McCarten returns to become Labour leader David Cunliffe’s chief of staff. The ironies are multiple. These two were the chief brawlers in the brutal and byzantine ruckus within Labour over Auckland Central in the 1980s.

A generation later the two will once again be on opposite sides of the political war. 

Not opposite sides. Prebble is campaign manager for ACT, not National. McCarten is chief of staff for Labour.

Mr McCarten is a similarly divisive figure, and already his old comrade Mr Anderton has said he won’t work for Labour this year, apparently because of Mr McCarten. Labour is billing Mr McCarten’s return as a symbolic healing of the rifts in the Left-wing family, but clearly the rifts do not heal easily.

What was interesting is that Cunliffe said he was sure Jim would still be supporting Labour, and then Jim said he won’t be while McCarten is there. What is surprising isn’t Anderton’s views, but that no one spoke to him in advance and hence Cunliffe said something that was contradicted an hour later.

The Herald:

But that presumes Labour’s existing voter base also favours a move to policies aimed at attracting the lost tribes of the left. There is a risk surely that some working, non-unionised, moderate social democrats will see a Labour Party raising taxes, advancing union interests, expanding the state and redirecting wealth to support beneficiaries and the poor as altogether less appealing.

Most non voters are proportionally under 30. I’m not sure a return to 1970s policies will be appealing to them.

Labour’s result in 2011 was its worst for generations. Its poll rating now, under Mr Cunliffe, has not increased much at all from its early-30s standings under David Shearer, despite promising expanded paid parental leave and a baby bonus for all those earning up to $150,000 a year. 

In August 2013 when Shearer was Leader, Labour’s average poll rating was 32.4%. In February 2014 their average poll rating is 32.2%.

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A fail for the press editorial

February 27th, 2014 at 12:00 pm by David Farrar

The Press says:

Cynics would say that the latest rise was an easy move for the Government to make. When the minimum wage rises by 50c, the Inland Revenue Department gets nearly 9c extra for every hour worked by a minimum- wage earner as the income tax liability increases. For workers with children, the Government’s Working for Families liability will decrease at the same time. All of this money will be funded by employers directly, and indirectly by the consumers who use the goods and services that those employers provide.

A number of people make this mistake. Putting up the minimum wage decreases the tax take for the Government. They have ignored the fact companies pay tax, and at a higher rate than individuals on the minimum wage.

A full time minimum wage of $13.75 an hour is $28,679 a year. Going to $14.25 an hour is $29,721. An increase of $1,042.

Tax on the former is $4,039 and the latter is $4,221. So an increase in tax of $189.

However the employer pays tax at 28%. Their profit will drop by $1,042 and hence the tax they pay drops by $292. That means a net reduction in tax to the Government of $103.

So a rather big fail for The Press editorial.

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Editorials on “gentlemen’s agreement”

February 26th, 2014 at 3:00 pm by David Farrar

The Press editorial:

Dunedin Mayor Dave Cull is defending the agreement under which former Dunedin North MP Pete Hodgson was paid by Cull’s council to lobby the Government to retain the core functions of AgResearch at Invermay. Hodgson was paid $3400 for duties which included advocating on the council’s behalf, contributing to a letter to Economic Development Minister Steven Joyce and writing a 10-page report for the board of AgResearch.

The council says that Cull was its main point of contact with Hodgson, but it could not locate a single email, contract or any other document relating to the agreement. Cull said: “I could describe it as a gentleman’s way of doing business in the south.” …

In matters involving public money, it is absolutely essential that the principles of transparency and accountability are upheld. There are sometimes good commercial reasons for withholding some information, but they don’t apply here. Cull has done Dunedin ratepayers a disservice with this handshake deal and his cavalier attempt to explain it.

Also an editorial in the Southland Times:

Could you smell the port and stale cigar smoke on Dunedin Mayor Dave Cull’s breath as he defended the “gentleman’s agreement” under which his council paid former MP Pete Hodgson for lobbying?

Mr Hodgson was paid $3400 for his work helping the council advocate that Invermay retain its core Ag Research functions. He was plausibly the best person for the job. But it was done on a handshake with nary a contract – and all that tedious accountability that goes with it – in sight. …

Mr Hodgson says the fact that nothing was written up “would probably reflect their trust in me”.

As far as the public is concerned, what this should reflect is the untrustworthiness of all involved.

A council, a mayor and a former minister of the Crown should collectively and individually know full well that this was dodgy and then some.

The Taxpayers’ Union, while acknowledging that it isn’t an eye-watering amount, detects that the council isn’t applying the most basic internal controls.

It is the principle, not the amount. But when it involves public money with one politician awarding it to another politician, you need to be absolutely transparent.

The good news is that while there was no contract, there was at least an invoice. The Taxpayers Union is pleased with this, but asking the question who then authorised the payment. The Mayor keeps insisting it had nothing much to do with him, while the Council says he was the primary point of contact. So who signed it off?

The ODT reports:

Chief executive Dr Sue Bidrose said yesterday invoices should have been included in the OIA response, but the staff member writing the response ”was simply answering the question ‘was there a contract?’ and the answer seems to have been no”.

It was also a ”mistake” not to write a contract for Mr Hodgson’s services, she said.

”It appears that there have been more than one of these mistakes and it appears that there is a small number of managers who were not aware [of council policy].”

The council did not use ”gentlemen’s agreements” and had reiterated to staff all employment transactions, no matter how small, should be covered by contracts.

Good to see.

As readers will know, I helped found the Taxpayers’ Union. On a modest budget and limited resources we’ve already made a lot of impact with both local and central government in attacking wasteful or sloppy spending, including the $19 million spent by ACC which by their own accounting was at best returning 14 cents in the dollar.  You can join the union for just $5, subscribe to newsletters for free, and/or donate to help keep us going. The board members are all volunteers. As we head into election year expect more of a focus not just on wasteful spending, but making the case for taxes to be reduced as the crown accounts head back into surplus.

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Housing Warrant of Fitness

February 24th, 2014 at 12:00 pm by David Farrar

The Herald editorial says:

At a first glance, Housing Minister Nick Smith’s announcement of a warrant-of-fitness scheme on state homes seemed like a step forward that was as significant as it was welcome.  …

On closer examination, however, there was much less reason for applause. The final words of Dr Smith’s announcement made it clear that the Government had not decided to apply the warrant of fitness to the private rental market or other social housing providers. Urgency on this issue is clearly not high on its agenda.

I think urgency and haste could backfire.

Dr Smith excused this inactivity on the basis that the Government should get its own housing stock in order first, and that the trial of 500 of its homes would show how a warrant of fitness could work. But there is little reason new rules for all rental housing could not be readily introduced.

I wonder if the writer of the editorial has ever been a landlord?

The trial includes a comprehensive 49-point checklist that means homes must be insulated and dry, safe and secure, and contain essential amenities such as bathroom and kitchen facilities. Each home will have to pass this checklist to get a warrant every three years. Any snags in this arrangement should quickly become apparent and be easily remedied. In only a matter of months, it should be possible to roll out the scheme to the private market. The Government, however, is unwilling to even signal that intention.

I think the person writing this has no idea about how demanding such a WOF would be. They think you can roll it out untested, and just makes any fixes as you go along. They think that one can suddenly have an army of house inspectors.

It could well be that there is merit in eventually rolling out the WOF scheme to private sector rental housing, but the history of Government is that of unforeseen consequences. If getting an WOF is too much of a hassle, or too costly to comply with, then it may lead to fewer houses being available to rent – which would push rental prices up for all tenants.

It is time to place some obligations on those offering homes for rent. Already, they benefit from tax breaks and untaxed capital gains. 

The Government has actually got rid of the tax breaks by eliminating the ability to claim depreciation on (most) investment properties. So I am unsure what this tax break is that the editorial refers to. And yes the capital gain is generally untaxed, but that is not derived from renting the property out.

I purchased a new apartment in 2011, and looked at keeping my old one and turning it into a rental investment property. I decided not to, as the potential return from renting it was so low after you account for rates, body corporate fees and maintenance, that it wouldn’t even cover the interest on the mortgage.

There are potentially benefits from a WOF scheme for rental housing, but the last thing you want is to have Government impose a mandatory new requirement on landlords without knowing how costly it would be, and how it might impact on supply and rental prices. Many things sound great on paper, but turn into disasters when they hit the real world.

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Dom Post on TVNZ

February 19th, 2014 at 1:00 pm by David Farrar

The Dom Post editorial:

State broadcasters are like Caesar’s wife: they have to be above sin and seen to be so. That is why Shane Taurima had no choice but to resign as head of TVNZ’s Maori and Pacific Unit. He had used the broadcaster’s buildings for a Labour Party meeting, and its email to organise a Labour meeting held elsewhere.

He broke the rules that require taxpayer-funded broadcasters to be politically neutral. State broadcasters must not use their position to promote the interests of any political party of whatever kind. Mr Taurima sought the Labour candidacy at the Ikaroa-Rawhiti by-election last year, but the actual party brand is irrelevant. He would also have had to resign if he had held an ACT party meeting at his workplace.

It is not clear which other TVNZ staff members were involved in the meeting or in other party activities. The company’s internal inquiry will find out and then TVNZ managers will have to decide what to do. Mr Taurima knew he could not defend himself and did the honourable thing. 

The honourable thing would be to not have done it in the first place. According to TVNZ management Taurima told them when he was rehired that he would not stand again.

Mr Kenrick said TVNZ had sought commitments from Mr Taurima after his tilt for Labour at the Ikaroa-Rawhiti candidacy before restoring him to his role heading the department. “The key focus was to get him to make an explicit choice between journalism and politics, and to make commitments around that. We relied in good faith on those commitments.”

Did he lie, or just a few weeks later change his mind and not bother to tell them?

Whether other sackings are called for is a matter of judgment.

The staff in that unit are all basically taxpayer funded, as it is not a commercial unit.

State broadcasters have a special duty to be politically even-handed. This does not mean, as some believe, that the journalists should have no views of their own. Every sentient human being has certain political beliefs or attitudes, and journalists are no different. But state journalists must be professional and not push any party’s barrow.

Mr Taurima insists that he has never allowed his personal politics to influence his work as a journalist, and it is interesting that the prime minister has not claimed any political bias at TVNZ. In fact he thinks they are fair.

The PM has been very nice, when he could put the boot in. For my 2c I don’t think Taurima’s interviews showed political bias. He pushed David Shearer hard when he interviewed him. The issue is his breach of ethical standards, not his previous interviewing.

Mr Taurima was allowed to return to the company after he failed to win candidacy, and this is a defensible decision. Again, the expectation was that Mr Taurima, once he had taken off his Labour Party hat and put on his broadcaster’s one, would act in a professional and politically neutral way.

However, it is now reported that in January he facilitated a Labour meeting – held on a marae and not on TVNZ property – on how to win the Maori vote. This meeting was also attended by Labour leader David Cunliffe. Mr Cunliffe says he strongly supports a politically neutral state broadcaster. Did he ask himself, then, why Mr Taurima was running this highly political meeting?

I’m amazed warning bells did not go off.

Will Taurima still seek the Labour nomination for Tamaki Makaurau? Will they select him?

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Dom Post on change not wanted

February 17th, 2014 at 11:00 am by David Farrar

The Dom Post editorial:

John Key’s Government came into office in the midst of the global financial crisis. Nobody was expecting things to improve quickly. Most people expected them rather to get worse. Mr Key made no promises of instant gains.

On the other hand, his Government’s management of the economy was a moderate one and did not go for a hard dose of austerity. It reduced the deficit over two terms rather than bringing it back to nothing with a bump. The result was that our economic pain was relatively mild, at least compared with Britain and the United States.

The Key Government’s response to inheriting a structural deficit wasn’t to slash and burn with a frenzy of spending cuts. It was very moderate and middle of the road. Initially some infrastructure spending was accelerated to help soften the recession, and then new spending was slowed down. The extreme response came from Labour who went on the record opposing every single measure of fiscal restraint. They said a cap on public sector employees would be a disaster. They opposed saving money through efficiencies in back office functions.  I can’t think of a single act of fiscal restraint that they haven’t opposed.

Now the Government is signalling a less stringent approach to the budget, with increased spending in areas like paid parental leave. It recognises that the voters feel they have done their penance and a modest pay-off is in order. 

As we head back into surplus, we gain choices again. Deficits do not give you much choice. There are broadly three things you can “spend” a surplus on – debt reduction, extra spending and tax cuts.

A moderate balanced party will propose all three. I expect parties may disagree with each other about the exact proportions, but the extremists will only push those that fit with their ideology. Will Labour go against the 70% who don’t support tax increases and go into the election only promising tax increases, and not offering any tax cuts?

Labour leader David Cunliffe has not produced a big turnaround in the party’s fortunes, and time is running out.

National’s slogan this year will be some version of “Don’t put it all at risk”, and at present the signs are that it will work. There is not yet a deep-rooted feeling of economic dissatisfaction. There is not yet a widespread dislike of the Government. So the basic competing slogan – “it’s time for a change” – is not decisive.

Labour are promising to expand welfare payments to families earning up to $150,000 a year. Policies like that are what will put it at risk.

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NZ Herald on Sallies report

February 13th, 2014 at 1:00 pm by David Farrar

The Herald editorial:

The Salvation Army has earned high credibility in social work for the practical, non-political way that it goes about its mission. It deserves the same credit for social research on the strength of its annual state of the nation report. The latest, featured in the Herald yesterday, offers a more balanced snapshot of our society than we get from research that sets out to find something going wrong.

The Sallies’ report suggests a great deal is going right. Educational disparities are narrowing. Gaps between passing rates from rich and poor schools, and Maori and non-Maori, are not as wide as they used to be. A higher proportion of Maori and Pacific children are enrolled in pre-school education. More school leavers are working or getting a qualification.

Fewer teenage girls are getting pregnant. While the number giving birth has been falling for many years, more recently the number having abortions has been falling too.

That is good news, as is the decline in infant mortality, especially for Maori. We were even drinking and gambling a little less.

Employment is increasing, not only among the young (up 9.4 per cent for those aged 15-24 last year), but the proportion of the over-65 population who are working has leaped from 15 per cent to 21 per cent in the past five years. That means more than a fifth of national superannuitants with super gold cards have not retired. Most of them will be in the 65-70 age bracket and could support themselves if the qualifying age for superannuation was raised.

All but a few hard core opponents have to concede that overall most things are heading in the right direction. And yes of course the age of eligibility should increase.

Incomes rose 2.6 per cent on average last year while the cost of living rose 1.6 per cent. Employees, with an average rise of 3.1 per cent, did better than the self-employed. 

All good.

The report shows that affording a house in Auckland and Christchurch has become even harder than it was at the height of the last boom. The median Auckland house price now exceeds 10 years of the average gross weekly wage. Household debt is rising again as economic growth gathers pace. The average household owes $121,200, giving a ratio of debt to earnings not quite as bad as five years ago but still nearly 150 per cent of the average household’s annual income.

Housing costs and some other adverse trends leave plenty of problems for social policy but it is important to acknowledge progress too.

Yep, overall a pretty fair and balanced report.

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NZ Herald on Buy Australia

February 10th, 2014 at 10:00 am by David Farrar

The Herald editorial:

A buy-Australian campaign in two Australian supermarket chains is a sobering lesson for the Green Party and anyone else in New Zealand who advocates the same thing here. The unfairness to suppliers from this country is exactly the effect a buy-New Zealand campaign has in other countries, though the scale of our market diminishes the impact on most of them and increases the damage to us.

Exactly. Its hypocritical to relentlessly claim we should only purchase from NZ suppliers, and then complain when Australian supermarkets promote Australian food over NZ food.

The best thing we can do is to focus on quality of product and price, not country of origin.

Ultimately the best response of excluded suppliers is to make their products doubly attractive and competitive on the same market. Quality, taste, price and brand reputations can trump the country of origin in consumers’ decisions. But it takes a sustained marketing effort, preferably before a threat of this sort comes along.

You can’t take export markets for granted.

The campaign will pass, of course. As soon as the supermarkets sense consumers going elsewhere for familiar items they no longer stock, the non-Australian brands will be quietly restored. But the lessons should not be forgotten when we are urged to buy on country-of-origin labels. Compulsory labelling is a fine principle of consumer information but if the labels are used for an exclusive purpose, fair competitors somewhere will suffer.

Also correct me if I am wrong, but the Australian supermarkets have not banned any NZ food. They have made a decision to only use Australian sourced food for their in-house brands. There is a considerable difference.

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Herald on baby bribe

January 31st, 2014 at 2:00 pm by David Farrar

The NZ Herald editorial:

David Cunliffe delivered one indisputably accurate comment during his State of the Nation address this week. “We need,” he said, “to put our resources where they will do the most good.” The Labour Party leader was referring to the requirement of any government to focus on children, but his comment was appropriate for any spending of taxpayer money. Why, then, does he propose paying families earning up to $150,000 a sum of $60 a week for each newborn baby until the child’s first birthday? Clearly, most people earning anywhere near the top of that range and many middle-income earners have no need for such money. Government resources would, therefore, be being put where they do the least good.

It’s an attempt to buy votes, but one that I think will fail. Most families that are better off would rather receive tax cuts than welfare. Better to pay less tax in the first place, than to be over-taxed and then have the Government hand back to you some of your own tax money as welfare.


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Dom Post on Ratana

January 27th, 2014 at 3:00 pm by David Farrar

The Dom Post editorial:

The only question now is: how many seats will the Maori Party lose this year? The party has lost the main reason for its being, which was the repeal Labour’s foreshore and seabed legislation. It has not really found another central cause to replace it. It is losing its two most distinguished politicians, Dr Sharples and Tariana Turia. And it has suffered the slow suffocation that all small parties suffer when they get into bed with a larger one.

The Maori Party may well lose one or even two electorate seats, but it is worth reflecting that if they lost two, then their party vote last time was high enough that they would have gained a list seat.

As the Maori middle class grows, it will produce more National supporters. At present, National’s share of the Maori vote remains small, of course, but it will rise, just as the Black Republican vote in the United States has increased. 

National picks up more support from Maori on the general roll than the Maori roll, but only post-election polls pick this up. In terms of the Maori seats, the records are:

  • 1996 – 6.1%
  • 1999 – 5.7%
  • 2002 – 4.2%
  • 2005 – 4.3%
  • 2008 – 7.4%
  • 2011 – 8.6%

So very modest increases.  But much better than the US where in fact black Republican vote has been declining (except for 2004).

And already we have seen a notable rise in the number of National Maori MPs in the general seats – a trend which might have been encouraged by the link between National and the Maori Party.

National’s 9th Maori MP is sworn in this week – Jo Hayes. The breakdown of Maori MPs by type of seat is interesting.

  • Maori Seats – 7 – Labour 3, Maori Party 3, Mana 1
  • List Seats – 12 – National 5, Greens 3, Labour 2, NZ First 2
  • General Seats – 6 – National 4, Labour 2

It is MMP, however, which has had the most dramatic effect on Maori representation in parliament. The share of MPs of Maori descent in the house is now greater than the proportion of Maori in the wider population. This increase is wholly good, because it means the Maori voice is better heard in the national marae. 

The proportion is now 20.7% of Parliament are Maori. This compares to Maori being 14.1% of the overall population and just 11.3% of the adult population. So that is a very significant over-representation.

Some argue that we no longer need the Maori seats as a result, and indeed the Royal Commission which recommended MMP also believed the Maori seats would not be needed.

This may indeed be true, but it may be better to put off abolition until a majority of Maori approve it. 

I agree abolition should only happen by consent, but surely it is time to start that conversation, and even have a referendum among Maori on whether they wish to retain the Maori seats, bearing in mind how over-represented Maori MPs now are in Parliament.

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The Press on education reforms

January 25th, 2014 at 2:00 pm by David Farrar

The Press editorial:

Prime Minister John Key, in his first big speech of the year, yesterday chose to focus on a subject that has traditionally been a political minefield and one on which the Government has come a cropper in the past. In choosing to unveil some radical new measures, and substantial new spending, with the aim of raising standards and bringing about what he called “a step change in achievement” in schools, Key also went into territory that Labour has regarded itself as having an ascendancy.

But first reaction from teachers, professional bodies and the teacher unions welcoming the proposals – something that must be unique for a National Party policy – indicates that they will likely be accepted and may be smoothly put into practice. They appear to be a serious-minded attempt to to bring about better performance from teachers and schools, one of the most important issues for the performance of the economy and the long-term good of society generally.

Few things could make a bigger difference to inequality than improving the performance of the tail of those in the education system. No amount of law passing or minimum wage hikes is going to make life particularly good for a kid who leaves school unable to read or write.

It is now widely recognised that school achievement is more strongly related to good teaching than to almost any other factor, including, within certain limits, class sizes. Recent studies have also been able to measure the effect of good teaching on the outcomes for pupils’ lives. A good teacher, the studies have shown, makes a measurable impact on pupils’ incomes (according to one American study up to $250,000 over a lifetime) and also produces better, happier citizens.

Recognising this, the changes announced yesterday aim to improve teaching with significant financial incentives and opportunities for the best principals to supervise more schools and improve their results, and for the best teachers to stay longer in the classroom, rather than move on to management, and to pass their skills to their colleagues. Collaboration across schools so the best practices get spread more widely will be encouraged.

One of the reforms will provide for up to 20 so-called “change principals” to earn an additional $50,000 a year for up to five years running schools that are struggling. This idea of trying to attract the best people to such schools to try to turn them around is obviously far better than allowing them to hobble along producing poor results and sometimes eventually falling over and having to be rescued anyway.

Our tolerance for poor results should be low.

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The Press on Mayoral accessibility

January 18th, 2014 at 12:00 pm by David Farrar

The Press editorial:

With the announcement this week of the appointment of a press secretary for Mayor Lianne Dalziel, along with a number of other appointments, the make-up of the mayor’s office is now complete. The mayor had earlier announced the appointment of a chief of staff to run the office. The mayor will have nine people working directly for her, more than twice the four that the former mayor, Bob Parker, had.

It would be interesting to compare the size of the various Mayoral offices to the sizes of their Councils.

In addition to a chief of staff and a press secretary, the mayor now has a senior adviser, a community adviser, a visits and ceremonials co-ordinator, two information officers and two executive assistants (one of them shared with the chief of staff). It must be hoped this staff will be committed to ensuring robust performance from the mayor’s office. It must also be hoped they will be committed to the greatest possible transparency and openness about the mayor’s work.

The mayor’s community adviser is Nicola Shirlaw, who was Dalziel’s campaign manager for the council election. That political connection is of no great significance by itself but the mayor must take care not to allow her office to become highly politicised or excessively inward-looking.

Of course it will be politicised. The job of the Mayor’s office is to get the Mayor re-elected. There’s nothing wrong with that per se. A Mayor who is doing a good job is more likely to be re-elected, so part of what the Mayoral office does is help the Mayor perform well. But they also of course promote the Mayor and try and get favourable coverage.

The office must also not become a barrier between the mayor and the media and public. Parker was commendably available to the media – replying with remarkable diligence and promptness to emails, texts and phone calls, even at the height of his political travails when there was little benefit to him from doing so. Dalziel is proving to be less accessible.

I didn’t know that about Parker. Good on him.

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NZ Herald on boat building contract

January 16th, 2014 at 1:00 pm by David Farrar

The Herald editorial:

The local boat-building industry says it is outraged that it was not awarded a government contract to build a ferry which will link the New Zealand territory of Tokelau to Samoa. On almost every level, its anger is odd.

The 43-metre vessel will be built in Bangladesh for $8 million. According to this country’s Marine Industry Association, the cheapest price for building it here would have been $14 million to $15 million. Awarding the contract to a New Zealand company would, therefore, have involved what amounts to a substantial handout to that boat-builder. In such circumstances, it is puzzling that the local industry feels even the slightest bit annoyed.

Yet Labour is also outraged that taxpayers did not pay three times as much for the boat.

Clearly, the Government was mindful of the pluses that would come from building the ferry locally. It indicated there was some room for manoeuvre by telling a Nelson boat-builder that its quote would need to be in the region of $9.5 million to $10 million. But the lowest bid from a New Zealand company, according to the Government, was about $23 million. That is almost three times the price of building the ferry in Bangladesh. For all the talk of the gains from buying New Zealand-made and of a new Government procurement policy that aims to create more incentives for local manufacturers, this was simply too wide a gap.

You go local when the prices are close to each other, not when one is three times the other.

Other criticisms of the awarding of the contract are similarly misplaced. Chief among these is the perception that any ferry built in Bangladesh will not be up to the task of making the often dangerous voyage across the Pacific. This disregards the fact that Bangladesh has a long tradition of boat-building. While best known more recently for breaking up ships, it has now become a major constructor of small ocean-going vessels as Asia’s traditional builders, such as South Korea and China, focus on larger container ships and tankers.

Western Marine Shipyard, which will construct the Tokelau ferry, is one of its most successful ship-builders.

I think the editorial is right that there was an inherent belief by some people that a Bangladeshi company can’t possibly be any good.

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A newspaper that pays no tax complains about tax avoidance!

January 16th, 2014 at 11:00 am by David Farrar

The Dom Post editorial:

Taxes are what we pay for a civilised society, according to the great American Supreme Court judge Oliver Wendell Holmes.

If that is so, then aggressive tax avoidance is an offence against civilisation.

I’d love to know what the Dom Post defines as aggressive tax avoidance. I presume it means tax avoidance done by other companies, but not by ourselves.

Google, for instance, whose slogan used to be “Don’t be evil”, in 2012 paid a mere $165,000 in tax in New Zealand. Amazon paid $1.6m tax on sales of $46.5m. And Apple paid $2.5m on sales of $571m. Does anyone think these companies are paying their fair share?

I’ve got a much better example. Fairfax Australia (owns the Dom Post) paid no tax at all last year on revenue of A$2.01 billion. That’s outrageous I’m sure the Dom Post agrees, and I look forward to them joining with the NZ Herald to campaign on their owners paying more tax. The fact it means they may have to sack a few editorial staff to afford their increased tax bills I’m sure is not what is preventing them from not being total hypocrites.

Or maybe the Dom Post will say you can’t compare them to Google and Apple because tax is paid on profits, not revenue. Well yes they are, so why the hell did the editorial not mention that actual profits made by Google and Apple in New Zealand? They made a conscious decision not to tell their readers that essential piece of information.

For the record I’m all for the IRD taking court action against tax avoidance that is artificial, as defined in the Tax Act. They do this on a regular basis. For example, they are battling APN (NZ Herald) for $48 million.

Some will argue that companies are entitled to minimise their taxes. Tax avoidance, after all, is legal, unlike tax evasion. Some even say that companies owe their loyalty only to shareholders, not the taxpayer, the government or their fellow citizens.

This is plainly wrong. Taxes provide the schools, hospitals, infrastructure and social services on which we all depend. Corporations benefit directly from state-funded education, research, roads, courts and public health programmes. So they should contribute to “the cost of civilisation”.

I agree people should pay their taxes. Fairfax has paid no income tax in the last year. This means they are not contributing to the cost of civilisation. According to their editorial it doesn’t matter what their taxable profit is, as that may have been minimised by accountants. Amazon paid tax equal to 3% of their revenue. As the Dom Post seems to think you should pay tax on revenue, I think Fairfax should pay A$60 million immediately as their contribution to the cost of civilisation.

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Herald hypocrisy

January 13th, 2014 at 3:00 pm by David Farrar

The Herald editorial:

Many firms that practice tax avoidance probably do feel wretched about it. But they owe it to their shareholders to pay no more tax than their lawyers and accountants say they must, and they transfer the blame to the legislators who leave loopholes for them, or who set taxes too high or spend the revenue unwisely. With the company tax rate at 28 per cent in New Zealand, lower than the top personal income rate, it is hard to justify corporate avoidance here.

A NZX filing by APN which owns the Herald in 2013:

APN News & Media [ASX, NZX: APN] today announced an update in relation to a tax dispute following a report received today from the Adjudication Unit of the New Zealand Inland Revenue Department (‘IRD’).

As stated in the Company’s 2011 Annual Report and the 2012 Preliminary Final Report lodged yesterday, the Company is involved in a dispute with the IRD regarding certain financing transactions.

The Company is satisfied that its treatment of the financing transactions is consistent with all relevant legislation and that no tax will become payable.

The dispute involves tax of NZ$48 million for the period up to 31 December 2012. The IRD is seeking to impose penalties of 50% of the tax in dispute and interest in addition to the tax claimed. In the event the Company is unsuccessful in the dispute the Company has tax losses available to offset any amount of tax payable to the extent of NZ$32 million.

These wouldn’t be financing transactions that resulted in a lower tax bill and hence was tax avoidance?

So does the Herald feel wretched about its own tax avoidance?

Will they apply their own moral standards to themselves and pay up the $48 million they owe the taxpayers of New Zealand, according to the IRD?

I look forward to both RNZ Mediawatch and the Herald own’s media column highlighting this flagrant case of total hypocrisy.

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The Press on oil exploration

January 9th, 2014 at 11:00 am by David Farrar

The Press editorial:

It is a long way from the exploration of a promising-looking gasfield and the development of a productive operation, and the outcome is far from certain. But the news that a well-resourced international consortium has committed $200 million to explore the Great South Basin, off the southeast coast of the South Island, is very welcome. Oil and gas production from wells in the Taranaki basin are already our fourth biggest export and generate hundreds of millions in revenue for the Government. The industry has made Taranaki one of the most prosperous regions in the country and created more than 3000 jobs. Finding another such productive area has long been sought. The areas with the greatest potential at present are in the Great South Basin and off East Cape. A successful result in either would be an enormous boost to our prosperity.

Yet one a Labour/Green Government would be against.

The search did not begin again in earnest until three years ago, when Dutch energy giant Shell along with the Austrian company OMV began to explore. Those two companies, along with the Japanese industrial conglomerate Mitsui, believe the seismic results are good enough to warrant the $200m commitment. Good enough means they believe there is 30 per cent chance of a commercial discovery.

30% is pretty high.

Green groups have predictably objected. Last year a meeting in Dunedin at which Shell was to talk about its plans with business owners was abandoned because of interruptions from anti-oil drilling protesters. Their objections are deeply misguided.

I would have thought Green groups would welcome NZ producing more of its own energy, rather than importing it from other countries.

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The Press on whaling

January 8th, 2014 at 10:00 am by David Farrar

The Press editorial:

The annual antics of the anti-whaling activists Sea Shepherd in the Southern Ocean are under way again.

The routine seems the same every year and is familiar. Japanese whaling ships arrive in the Southern Ocean to begin hunting whales. The pretext for the hunting is that it is for “scientific research” although that is almost universally disputed.

Most impartial observers believe the real reason for the hunting is to keep what remains of the Japanese whaling industry going.

Each year Sea Shepherd vessels track the whalers and aggressively attempt to disrupt the hunting.

Sea Shepherd and the whalers feed off each other. There is almost no commercial market for the whales anymore in Japan. The whalers carry on, because they don’t want to be seen to be buckling to pressure. I suspect if one ignored them, they’d stop within a decade.

This year the Green Party has taken up Sea Shepherd’s cry and called on the Government to send a naval vessel to the area to demonstrate New Zealand’s disapproval of the Japanese behaviour.

It may strike some as strange to hear the Greens promoting a show of military force but in any case the idea is foolish.

Even if the Japanese were breaching some law, New Zealand has no jurisdiction in the area and could do nothing about it.

Normally the Greens insist that military have no role in international disputes, but when it comes to whaling they want to send in a frigate!

Governments, both Labour and National, have said repeatedly that they do not accept Japan’s cover story used to justify its whaling and have called for the Japanese to end the practice.

That is the line taken consistently in international forums such as the International Whaling Commission for many years.

Last year, the present National Government went further and joined an action brought by the Australian Government in the International Court of Justice to have Japan’s whaling declared illegal. New Zealand’s case was strongly argued by Attorney-General Chris Finlayson.

The court’s decision is expected about within two or three months.

That will be eagerly awaited. Hopefully NZ and Australia win.

As Foreign Affairs Minister Murray McCully said yesterday the whaling is being carried out “substantially for the purposes of pride and we’ve got to try and negotiate a way to get past what is a pointless activity . . .”

New Zealand is fully involved in that diplomatic activity.

Sea Shepherd’s Southern Ocean publicity stunt does nothing useful to advance it.

I think Sea Shepherd know that the practice would probably stop, if they were not there highlighting it. But then they would have no reason to exist. They and the whalers have a symbiotic relationship with each other – both needs the other to stay relevant.

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A very weird editorial

January 6th, 2014 at 8:48 am by David Farrar

Today’s Dom Post editorial is very weird. It links the Obama-Key round of golf to the US-NZ thaw in military exercises and that the US is trying to limit China’s influence in the Pacific. It goes on to warn about getting too chummy with the US.

It is one of the more bizarre editorials of recent times. First of all it ignores the fact that Obama is well known for not using golf as a diplomatic tool. Only 5% or so of his games have been with elected officials, half of them with Joe Biden. He played a round of golf with Key, because they get on well and were both in Hawaii. To try and make this all about China is frankly weird and off the planet.

Even worse, they seem to be suggesting that the game of golf was a bad thing, because it might offend China. Jesus Christ. Seriously? I can only presume the normal editorial writer is on holiday, and this one was written by a 17 year old intern.

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Dom Post on living wage

December 19th, 2013 at 3:00 pm by David Farrar

The Dom Post editorial:

The stated aim of Wellington City Council’s living wage policy is to reduce poverty and lift workplace morale and productivity. If only life were that simple.

It is not. Poverty can no more be eliminated at the stroke of a pen than world peace can be delivered by a beauty contestant wishing for it.

Mayor Celia Wade-Brown’s council is not reducing poverty. It is simply taking money from one group of citizens – ratepayers – and giving it to another much smaller group – the 450 council staff who presently earn less than $18.40 an hour.


The gesture would be admirable if councillors were funding the $750,000 cost out of their own salaries, but they are not. It is easier to be generous with other people’s money than one’s own.

Even worse, at least one Councillor who voted for the living wage, refuses to implement it in his own business. He won’t pay it himself, but will vote to force ratepayers to do so. He is of course a member of the Labour Party.

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Dom Post on referendums

December 17th, 2013 at 5:54 am by David Farrar

The Dom Post editorial:

The referendum on state asset sales was not the first held under the Citizens Initiated Referenda Act 1993. It was the fifth.

If opponents of partial privatisation believe the Government is now honour bound to reverse its position on state asset sales, then previous governments were presumably honour bound to give effect to the popular will expressed in referendums on firefighter numbers, the size of Parliament, tougher prison sentences and smacking.

Yes I look forward to Labour and Greens announcing that the first act of a Labour/Green Government will be to reduce the size of Parliament to 99. If they refuse to do so, then by their own rhetoric they are being arrogant and out of touch.

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The Press on referendum

December 16th, 2013 at 7:35 am by David Farrar

The Press editorial:

There was never any chance the present Government was going to take any notice of the latest one.

In any case a botch-up by the organisers meant it was delayed so that by the time it was held, the programme it was meant to influence was almost over.

Incredible they had such a high proportion of duplicate signatures.

The latest referendum was not strictly a citizens’ initiated one.

Unlike earlier referendums – on the number of MPs there should be in Parliament, on the proper punishment for violent offending, and on smacking of children – it was not led by any great popular groundswell.

Instead, it was largely promoted by the Green Party.

It spent a significant sum organising the petition for it.

Not sure the Greens spent any of their own money on it. They used their taxpayer funded parliamentary budget. The main purpose of doing so was to collect e-mail addresses from the petition.

To the loaded, if muddled question, a clear majority of voters signalled their opposition to asset sales, although not in such large numbers as some had expected.

In all the previous referendums, the vote for the position supported by those promoting the issue has been won by majorities of at least four to one, and in one case (in the poll on violent offending) by nine to one.

In the latest poll the margin was two to one.

Considering the concerted campaign run by those supporting the no-vote, who would have been expecting better, it was not a striking result.

It was a confusing question. Some of those who voted no might want more than 49% of assets sold. Some might want four of the five companies sold, but not all five. And yes the margin was way less than most expected.

Referendums are a crude instrument for influencing public policy. They require simple yes-no answers.

Most political questions are more complex than that and involve trade-offs.

It is for that reason that few countries bother with them. The latest one was a prime example.

The issue it dealt with was decided with the result of the last general election. Whether voters are still happy about that will be properly judged at the next one.

Labour declared the last election was a referendum on asset sales. They were right.

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Disagreeing editorials

December 13th, 2013 at 2:00 pm by David Farrar

The Dom Post says the MFAT leaks were justified:

That is why the leakers could argue they had a wider duty than their narrow duty of loyalty to the Government. Of course bureaucrats should not and must not leak willy-nilly. A broadly impartial public service should be able to be trusted with certain kinds of information. Leakers know they run a risk if caught. They must be quite certain that the public benefit of the leak outweighs the duty of confidentiality. And they must be prepared to face the music if caught.

In this case there was a wider public duty and therefore the leak was justified. No government has the right to demand silence from the victims of a misbegotten purge. No government should expect the “debate” to be confined to the victims and their executioners. No government should seriously expect this sort of thing not to leak.

I note the Dom Post was the recipient of many of the leaks.

The Press has a different view:

The proposed restructuring, which had been ordered by the new head of MFAT to better align the ministry with New Zealand’s evolving trade promotion and diplomacy needs from Europe to Asia, aroused enormous opposition within the ministry. MFAT people had, of course, every right to oppose the changes. But, as Rennie observes, at that stage the correct and professional way to do that was through the proper process, which had then barely begun. In this case, the public servants concerned were not blowing the whistle on any impropriety but were seeking rather to shortcut and sabotage a proper process.

This is key. The Tier 3 managers resorted to sabotage before the process had barely begun.

The motive, at least so far as the leaker of the Cabinet papers is concerned, was ultimately to discomfit the Government. That person could not be identified with certainty but there was a strong suspicion it was a former member of the Labour Party research unit. Other MFAT individuals may have been trying to protect themselves and their own positions in MFAT.

The point about leaking and whistleblowing is that they are justified as serving the public interest by the need to protect the integrity of an institution or a system. In this case, the leakers undermined the system by taking on what amounted to a party-political role. They also undermined the honourable cause of whistleblowing.

I agree with The Press.

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Herald on the need to improve education

December 6th, 2013 at 1:00 pm by David Farrar

The Herald editorial:

When bad news is delivered, there is always a temptation to shoot the messenger. Thankfully, that, by and large, has not been the case with this country’s sharp drop in international education rankings in an OECD survey that assesses the knowledge and skills of 15-year-old pupils in mathematics, reading and science in 65 countries. In maths, New Zealand dropped from 13th three years ago to 23rd, while in science the fall was from seventh to 18th. In reading, where this country also ranked seventh in 2009, there was a slide to 13th.

To her credit, the Education Minister, Hekia Parata, did not attempt to discredit the Programme for International Student Assessment (Pisa) rankings. She chose instead to depict them as confirmation of the challenge ahead. It fell to think-tank the New Zealand Initiative to underline the rankings’ serious implications. This “Pisa shock” should, it said, be a catalyst to change education for the better. The institute pointed to the example provided by Germany, which in little more than a decade had achieved the sort of improvement that must now be sought by this country.

Hopefully those who resist change will now concede there is a need for change.

Broadly, the Pisa assessment identifies the lifting of teacher quality as the key to such a turnaround. The best-performing countries, it says, put a special emphasis on teacher selection, training, career incentives, and innovative teaching. When deciding where to invest, they prioritise the quality of teachers over classroom sizes.


The importance of excellent teaching comes as no surprise. People have become increasingly aware of this, and are keen to see high-quality teachers acknowledged and rewarded appropriately. Ms Parata has proposed the development of a new teacher appraisal system, a requirement for all trainee teachers to have a postgraduate qualification and, potentially, performance pay. The latest Pisa rankings confirm all would be welcome. It can be no coincidence that in world-leading Shanghai, performance-related pay for teachers is normal.

The time has come for it. Top teachers should be able to earn over $100,000 a year, just for being great teachers.

But implementing their findings on what works will require political will. The teacher unions will resist any change to a national bargaining system that rewards experience rather than excellence. 

The first thing that should go is the national bargaining system. Let each school pay its teachers what they want to. Let them compete for the best teachers!

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