Editorials on whether blogs are media

December 3rd, 2013 at 3:00 pm by David Farrar

The Press editorial:

A recent decision by a District Court judge that the well-known, some would say notorious, Whale Oil blog is not a news medium highlights the difficulty. …

In a paper on new media published last year, the Law Commission observed that bloggers are often highly partisan, can be offensive and abusive and are not accountable to anybody.

The commission later modified that view to note that some of New Zealand’s 200 or more current-affairs bloggers have become a rich alternative source of information and commentary.

The Whale Oil blog run by Cameron Slater certainly fits the commission’s first description. His commentary on a wide array of topics is heavily tendentious and often gratuitously rude.

His campaigns can also be wrong-headed, the most notable being a wildly irresponsible campaign a couple of years ago against name suppression that resulted in his incurring convictions and stiff fines.

But he also attracts more than 1 million visitors a month, more than the next five New Zealand bloggers put together and he has broken stories that have been taken up with gusto by other media.

These facts, Slater argued in the District Court recently, were sufficient to make him a journalist and his blog a news medium as defined in the Evidence Act.

He made the plea in order to be able to claim a protection provided by the act so he would not have to reveal his sources in a defamation action that has been brought against him. The judge rejected the submission.

While Slater’s blog is miles short of what most people would think of as a responsible medium that should be entitled to the protection of the law, the decision is almost certainly wrong.

Very good of The Press to argue that blogs can qualify for media protection. An unthinkable view from them a few years ago.

The Herald editorial agrees:

Blogger Cameron Slater has been told by a Manukau District Court judge his “Whaleoil” website is not a news medium. This will surprise everybody aware of the Len Brown affair. Whaleoil broke that story and was almost alone among news media in covering the seamy details. Muckraking to that degree might not be to everyone’s taste but if anybody wants to rake it or read it, they have a right to do so. The ruling by District Court Judge Charles Blackie will not stop them but it denies Whaleoil a right asserted by all news media to protect their sources from discovery in court.

The case has nothing to do with the Brown affair. Slater is defending an action for defamation on a different subject. The judge’s ruling is important for its general application to news and comment online, and possibly for the future regulation of mainstream media too.

The ruling does have wide ramifications.

The right that Slater seeks is not particularly generous, or final. If a case goes to the High Court, news media may be forced to betray a confidential source to the judge, who will decide whether confidentiality overrides other considerations in the case. Other jurisdictions give media freedom higher protection. A blogger might not have the means to challenge this ruling in a higher court but it should not stand. News comes in many and varied forms and the courts should recognise it when they see it.

Again, very welcome to see the Herald take this view.

Maybe the Newspaper Publishers Association Media Freedom Committee could consider assisting with the appeal?

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Beware the regulation

December 2nd, 2013 at 7:43 am by David Farrar

The Herald editorial:

In themselves, the Government’s proposed amendments to the Fencing of Swimming Pools Act contain a reasonable degree of common sense. What can be wrong with changes that aim to reduce the risk of children drowning? And if the new law would mean even portable or inflatable pools need to be fenced off, isn’t it right to encourage parents to adopt best practice and empty them after each use?

The only problem is that the proposal is a further sign of a Government regulatory itch that is now of eczematous proportion.

A fair point.

Regulation appeals to governments because it is the easiest response to a problem. But each affects people’s freedom in some way. At their worst, regulations can also skew patterns of investment and the use of economic resources. That is why any government is right to question whether a planned restriction is strictly necessary. And if one is implemented, it should watch it in practice, not least for unintended consequences, and continue to ask if it is justified.

The Government should, therefore, be asking if changes to the swimming pool legislation are necessary when the most stringent fencing will not save young children from all potential water hazards. Many pools are, after all, not far from beaches or lakes, which cannot be barricaded in the way that private pools are meant to be.

Kids can drown in baths. Maybe we should require baths to be fenced off. Also maybe Councils should have to fence off all streams, rivers and lakes. And kids have been known to fall down drains, so perhaps we need to fence off all drains as well.

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Herald says if there is that much oil there, we should dig it up

November 27th, 2013 at 2:00 pm by David Farrar

The Herald editorial:

Now Greenpeace has given up its seaborne protest against exploratory oil drilling off Raglan it is not clear what it intended to prove out there. Once one vessel of its flotilla entered the statutory exclusion zone the protest statements became somewhat contradictory. Sometimes they said their action showed the exclusion zone was not justified, at other times they reckoned it proved Anadarko Petroleum was reckless.

They seem very disappointed they were not arrested.

A report commissioned by Greenpeace last month imagines an undersea drilling accident could release 40,000 barrels a day. If we have an oil well of that scale and pressure under our continental shelf it would be very good news indeed and we should find it.

A very good point. The price of oil is US$93 a barrel or NZ$113 a barrel. So that would be $4.5 million of oil a day. Over a year that is $1.65 billion. Why would we want that left there, so we have to buy more oil from the Middle East instead?

Unfortunately for our prospects of wealth, but reassuring for our coastal environment, few experts agree with the Greenpeace report. If oil or gas reserves can be found, they are likely to have a gentle flow more easily plugged.

The good news is that even looking for the oil is involving spending of $1 million a day – which benefits the NZ economy.

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Herald on Air NZ sale

November 19th, 2013 at 2:00 pm by David Farrar

The NZ Herald editorial:

According to the Labour Party leader, David Cunliffe, the timing of the Government’s selldown of shares in Air New Zealand is arrogant. Describing it as astute would have been far closer to the mark. Shares in the airline have been trading at a five-year high and investment advisers have voiced their enthusiasm for them. What better time could there be for the Government to reduce its holding in the national carrier from 73 per cent to 53 per cent?

That is a good question. Unless you believe that 73% is the exact right amount of shares for the Government to hold. Which is like believing in astrology.

One can make a principled case for 100% or for 51% (or for 0%) but to insist it must be 73% is daft.

The selldown has been criticised because it is being done just before a referendum on the part-sale of state assets. That complaint is misplaced. The focus of the Government’s mixed-ownership model strategy and, therefore, the referendum has always been the part-sale of the state’s three power companies, not an airline that the government acquired essentially by accident. Air New Zealand is very much an ancillary part of that strategy.

The referendum question also includes Solid Energy. It is a very badly worded question. Because if you think the Government should sell off the power companies and Air NZ, but should not sell off Solid Energy (because we won’t get 10 cents for it) then you should vote no I guess. Likewise if you think the Govt should sell more than 49% of any of the five companies, then again you arguably should vote no.

Green co-leader Russel Norman has gone so far as to suggest the selldown could lead to reduced regional services or higher fares.

I wish there was a competition for the most financially illiterate comment of the year, so I could nominate it.

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Christchurch planners v developers

November 11th, 2013 at 10:00 am by David Farrar

The Press editorial:

Friction between property developers and local body planners is to be expected.

Developers want to be able to get on with their separate projects, doing what they need with the minimum of bureaucratic oversight.

Planners are concerned not just with the outcome of any individual project but also with its impact on the bigger picture of what is going on in the city.

Planners also want to see that rules, which have been adopted through appropriate processes for good reasons, are properly applied.

The two groups’ aims are not necessarily in conflict – developers want to get stuff done, planners (ideally) want to let it be done (provided the rules are followed). 

The statement that planners want to let things be done is highly contestable!

After the debacle earlier this year of the Christchurch City Council building consents process, which led to the council losing its status as an accredited consenting authority, it is alarming to hear home builders complaining that red tape and “design palaver” in the council planning process are holding up the construction of apartments and units.

The council has rejected the complaints, saying any delays come from developers failing to come to grips with new, tougher design rules.

But when a developer of the prominence of Mike Greer – owner of the region’s biggest house building company and who presumably runs a sophisticated operation capable of understanding any regulatory requirements – says the council’s bureaucracy is making it nearly impossible to build affordable housing, the complaint must be taken seriously.

As Christchurch has a serious housing shortage, you would think they would be doing what they can to make it easy to build more housing.

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Dom Post says Labour needs clean out

November 11th, 2013 at 6:52 am by David Farrar

The Dom Post editorial:

Labour leader David Cunliffe has been crowing about the growing number of National MPs who have decided to stand down in 2014, likening it to rats deserting a sinking ship. Instead of seeking to make political capital out of his opponent’s obvious drive to bring in new talent at the next election, he would do better to follow suit and start sending the underperformers and time-servers in his own caucus the message that it is time to move on.

Almost a third of Labour’s caucus entered Parliament in the 1980s or 1990s.

Rejuvenation is critical to all political parties. It allows them to bring in new blood to remain fresh in the eyes of voters. However, all too often it is not the parties themselves that do the job, but the electorate, via crushing defeats which see large numbers of sitting MPs turfed out of Parliament.

That is what is so significant about the rejuvenation underway in National. So far, seven of its 59 MPs – nearly an eighth of its caucus – have indicated they will not seek re-election, and there was talk last week that up to six more are considering whether to stand again.

Rejuvenation is a sign of strength, not weakness.

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ODT on KiwiAssure

November 8th, 2013 at 7:00 am by David Farrar

The ODT editorial:

The suggestion KiwiAssure will be run by Kiwibank is not sensible.

The success of Kiwibank will be put at risk by tacking on an insurance company with a domestic focus.

Voters only have to look at the downfall of AMI, a Christchurch-based insurance company which substantially undervalued its reinsurance obligations and ended up with the Government – and taxpayers – having to step in to bail it out.

Of course, a government bail-out is exactly what will happen to KiwiAssure if it does not spread its reassurance risks widely.

Reinsurance for a totally-owned government-controlled insurance company will be expensive.

There can be no discounted policies on offer; it does not make sense. …

Kiwibank appeals to loyal New Zealanders who like the idea of investing their money where it will be used for the benefit of fellow Kiwis in obtaining mortgages, extending businesses and generally contributing to economic growth.

There is no such incentive for taxpayers in owning an insurance company.

Political parties do not have a good history of being in business.

New Zealand Post is the latest state-owned entity to run into problems, even though it is propped up by Kiwibank.

Appointing Kiwibank to prop up an insurance company is the wrong option.

Forcing Kiwibank to set up a full insurance company is daft and damn risky. We already have 92 insurance companies in New Zealand.

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Herald on KiwiAssure

November 5th, 2013 at 1:00 pm by David Farrar

The Herald editorial:

Nothing in the policy announced by Mr Cunliffe at the weekend dealt with any of the real insurance policy issues arising from Christchurch. The announcement was little more than a replay of a commercial for KiwiBank which, like it or not, could be saddled with the insurance company. “KiwiAssure will work for all New Zealanders,” Mr Cunliffe declared. It would be “a service-focused, state-owned company that has their best interests at heart”. It would “keep profits from this crucial industry in New Zealand”.

Wisely, he did not quite claim it would offer cheaper premiums than existing companies. Christchurch had an insurance company that did that. AMI had come to dominate the local market by undercutting competitors and the earthquake exposed its inability to meet all of its liabilities.

KiwiAssure could well fail in the case of another large earthquake, and it would do huge reputation damage to NZ Post and Kiwibank if it did.

The AMI experience is salutary for national taxpayers, too, when they hear Labour’s assurance that its company would not carry a government guarantee. The present Government quickly came to the relief of AMI’s policy holders, taking over the worst liabilities and selling AMI as a going concern to the multinational IAG. It is hard to imagine a Labour Government acting any differently if a state-owned insurer fell into the same trouble.

Of course it would have to be bailed out, if it is touted as a state owned insurance company.

Insurance is almost the last business that should be nationalised. Its purpose is to share risk internationally.

That is the key point. It’s incredibly dumb to set up an insurance company that will have all its exposure in one market.

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The Press on Cunliffe

October 29th, 2013 at 9:00 am by David Farrar

The Press editorial:

But the poll has brought home the harsh reality that it was always going to take more than just the replacement of the maladroit, tongue-tied Shearer with the clever, experienced, articulate Cunliffe to improve Labour’s fortunes. And for all his touted virtues and supposed preparedness for the role, Cunliffe, in his first few weeks in the leadership, has been less than assured.

He has not got the better of Key in the House. A publicity stunt designed to highlight difficulties young people have buying an affordable house in Auckland backfired when the chosen example was a 23-year-old complaining about not being able to afford a pricey house in one of the more salubrious suburbs that he was not sure he was going to live in anyway.

Yeah I loved how Labour campaigned for the right of 23 year old property investors to buy a half million dollar home with a less than 10% deposit.

In a speech to trade unionists, Cunliffe was heard breathing fire as he told them what they wanted to hear on industrial policy, which he shortly afterwards cooled down considerably for more general consumption. Skirmishing with the Government over the SkyCity convention centre deal, he has been studiously evasive over what Labour would do.

Say one thing to one audience, and another elsewhere and hope no one notices.

None of this may be particularly significant but it points up a shallow opportunism and an unsettling lack of substance in what Cunliffe has so far offered.

National’s continuing high ratings in the opinion polls are almost certainly attributable to satisfaction with the Government’s handling of the economy, the core issue in any general election. On that score, the Government has done well, with growth, inflation, unemployment and the country’s finances looking good, certainly by international standards, and likely to remain so. Cunliffe has not yet presented any reason for voters to believe a Labour-led government would do any better.

As far as I can tell Labour’s economic policies are for more tax, more spending, more debt and more inflation.

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Good news for the West Coast

October 25th, 2013 at 9:00 am by David Farrar

Stuff reports:

Australian miner Bathurst Resources has hopes of gaining access to the Escarpment coal mining site by Christmas after receiving final Environment Court approval for the controversial project on West Coast conservation land.

The court’s final approval was granted yesterday. It had said on August 8 that it intended to grant consent to the Escarpment mine on the Denniston Plateau, near Westport. However, the approval may be appealed. An appeal must be lodged within 15 days. …

The Government welcomed the court’s decision, labelling it exactly the type of investment the country needed to create jobs and higher incomes.

The Green Party decried the sacrificing of the Denniston Plateau and its unique landscape and threatened species for an open cast coal mine.

Have you seen photos of the Plateau? It’s pretty ugly to be blunt.

The company was still confident of producing about 180,000 tonnes of coal from Escarpment by the end of June next year, Bohannan said. It would be taken by rail to Lyttelton and shipped from there, and also shipped from Westport to Taranaki for export.

Bohannan said the coal would end up in steel mills and other production facilities in Japan and China mainly. Economic Development Minister Steven Joyce and Energy and Resources Minister Simon Bridges welcomed the decision.

“The Escarpment Mine and associated works are expected to create 225 direct jobs and approximately $85 million each year will go to employees, suppliers, contractors and transport providers,” Bridges said.

“This is great news for the West Coast. The mine will inject almost $1 billion into the New Zealand economy over six years, and provide $30 million each year in royalties and taxes,” Joyce said.

West Coasters need jobs. This will provide them.

On a sort of related issue Stuff reports:

Raglan residents are fuming after learning that a United States oil company is a month away from drilling off their coastline the deepest exploratory well in New Zealand’s history.

Texas-based Anadarko Petroleum Corporation plans to begin drilling the well in 1500 metres of water before December.

Anadarko was held liable, with BP by a US judge for the Gulf of Mexico oil spill of 2010. The company paid BP US$4 billion to settle claims.

Raglan Fishing Charters’ Brian Hooker is worried about the environmental impact on marine life and is threatening to lead a fleet of boats to picket the Anadarko vessel the Noble Bob Douglas when it arrives at the end of next month.

Drilling will be carried out in water 1500m deep at the Romney Prospect in the Taranaki Basin about 100 nautical miles (204km) west of Raglan after the Government granted a licence in 2006.

So the exploration will be 204 km offshore. That is akin to the distance between Wellington and Wanganui.

I also note he licence was granted in 2006. Will Labour condemn the exploration?

The well will be New Zealand’s deepest and comparable to the Macondo well, which spilled an estimated 4.9 million barrels of oil into the Gulf of Mexico during 87 days in 2010 after an explosion that killed 11.

Don’t you love it when media report advocacy as fact. Who says it is comparable to the Macondo well? Is it also comparable to the 39,999 wells that didn’t have a spill?

Mr Hooker is angry no-one consulted the people of Raglan and asked his opinion before the licence was granted.

“People are going to get riled up. They [Anadarko] are going to get a lot of obstruction to that job.”

Anadarko would be in the neighbourhood for a short time but its activities would have a permanent effect, he said.

“It’s going to ruin the seabed and the sealife. It’s going to f…… change the ecosystem on that coast and for what reason? For gold.”

You would think the exploration is happening 2 kms off-shore, not 204 kms out to sea.

The Dom Post editorial is a good read also:

Instead it has been left to industry spokesman David Robinson to point out that Greenpeace’s worst-case scenarios take no account of the differences between the Gulf of Mexico and New Zealand’s waters or the technological developments since the Deepwater disaster. Here, unlike the Gulf, the most likely finds are gas and light condensate, not heavy black oil. Here, the pressure in underwater fields is typically so low gas and condensate have to be pumped out. At Deepwater Horizon oil spewed out. Then, a cap for the well had to be designed and built before it could be deployed. Now so-called “stacking caps” are kept at strategic locations around the world, available to be deployed at a couple of weeks’ notice.

None of that is an excuse for complacency. Immense damage could be done even by a seeping well in a couple of weeks. But nor is it reason to turn the country’s back on an industry that could provide a massive boost to the economy, generate a swag of high-paying jobs and swell stocks of a scarce resource.

Details most would be unaware of.

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Dom Post on Planet Peters

October 24th, 2013 at 1:00 pm by David Farrar

The Dom Post editorial:

Things are simple on Planet Winston Peters. There, all that is necessary for something to happen is for Mr Peters to declare it to be so.

Hence, delivering inhabitants of Planet Peters a higher rate of return on their retirement savings is simply a matter of him promising a “world class model unsurpassed by anything in the world”. Protecting those savings from sudden market drops is an equally simple matter of guaranteeing the capital invested in the scheme. No downside, no need for individuals to monitor the performance of their investments. Just leave it all to Mr Peters. In fact, vote for Mr Peters and you can have your cake and eat it too.

Unfortunately, Planet Earth orbits a different sun from Planet Peters. In this universe, the value of investments is determined not by political decree but by events beyond the control of individuals and governments. The price someone is prepared to pay for a hectare of land in Dannevirke, 500 grams of butter in Paris or a shareholding in Air New Zealand is influenced by the weather in southern Europe six months ago, the progress of negotiations over the debt ceiling in the United States, the political situation in China and a thousand and one other imponderables.

Mr Peters, for all his claims to omniscience, does not control those things. Markets go up and markets go down. What was a solid investment last week is a poor investment this week and vice versa.

The only way Mr Peters can guarantee the capital invested in any particular fund is to require those who have not invested in it to foot the bill if its managers misjudge the market. The only way he can guarantee a superior return for his “KiwiFund”, especially when he proposes to handicap its performance by directing where it invest its funds – “substantially in New Zealand” – is by pumping public moneys into it when the inevitable happens and other funds outperform it.

The editorial is spot on. Peters is proposing that taxpayers underwrite $20 billion dollars or more of investments.

As I said earlier this week, Peters should set up his own KiwiSaver Fund and lets see how many people actually trust him enough to invest in it.

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Herald on TPP talks

October 8th, 2013 at 12:00 pm by David Farrar

The Herald editorial:

New Zealanders will be mildly amused that their Prime Minister has stepped into the breach left by US President Barack Obama’s inability to be at Bali this week to chair an important meeting of the proposed Trans-Pacific Partnership trade agreement. But we can be proud, too, that New Zealand still has a leading role in this project. …

It would be easy for such an ambitious project to become unwieldy and lose focus as more countries join the talks. There is always the risk that late-comers are joining the talks for the sake of appearances rather than with a serious intent.

But the last to join, Japan, seems serious. In fact its reformist Prime Minister, Shinzo Abe, may be the leader keenest to have something definite agreed by the end of this year. That goal, set by President Obama, should concentrate the minds of the meeting that it falls to John Key to chair.

If Japan agrees to a phasing out of agricultural tariffs, that would be huge.

But if it can lower barriers to our exports, New Zealand may have to make concessions in other areas. Since trade negotiations typically proceed in secrecy so that positions are not solidified by political pressure, the possible concessions can arouse fearful speculative opposition.

Opponents of TPP in New Zealand fear the Government will have to compromise on pharmaceutical purchasing, forcing Pharmac to buy prescription drugs on terms dictated by suppliers, particularly in the United States. More generally, opponents warn that the foreign companies will be able to claim damages in international courts against any Government decision that harms their investment here.

The other area of potential concern is around the US proposed intellectual property chapter. It has provisions in it such as extending copyright from life plus 50 years to life plus 70 years. I think life plus 20 is more than enough personally.

To date the NZ Government position has been to reject clauses that would require a change to our existing IP laws. I hope that position continues. There can be economic costs to having overly restrictive IP laws – as Australia has calculated.

 

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The pitfalls of public ownership

October 4th, 2013 at 12:00 pm by David Farrar

The Herald editorial:

The Green Party has called the Government’s bail-out of Solid Energy “privatisation by stealth”. Would that it were so. The state coal company will cost the taxpayer $155 million under the terms of the bail-out. It would have been more if the banks holding most of the company’s $380 million debt had not agreed to exchange just $75 million of it for shares in the company.

The banks could have insisted on repayment of all the debt, liquidating Solid Energy and costing 1,000 jobs.

But State-owned Enterprise Minister Tony Ryall is saying little to suggest there is any prospect of Solid Energy going back on to the partial privatisation programme with the power generators and Air New Zealand. More is the pity. The rise and fall of Solid Energy is a textbook example of the pitfalls of public ownership.

There is a case for the Government to own some monopolies like Transpower. There is no case (in my mind) for the Government to own a coal company.

Labour’s state-owned enterprise spokesman, Clayton Cosgrove, never tires of the phrase “asleep at the wheel” when blaming ministers for the company’s ambitious investments. But Treasury records show that in 2010, when coal was still booming on China’s continuing steel production and the board of Solid Energy was making big plans to diversify, the Government was cautious.

Indeed. The Government turned down the funding for the big plans. I suspect Labour would have handed over a billion dollars and renamed Solid Energy KiwiCoal.

If world prices pick up and the company can entertain wider ambitions again, it should be sold to the biggest bid. There is no reason for coal to be a state concern and every good reason to relieve the taxpayer of further risk.

Absolutely.

We should sell TVNZ also, while someone will still pay money for it.

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Dom Post on Labour’s own goal

October 2nd, 2013 at 11:00 am by David Farrar

The Dom Post editorial:

The immensity of the task facing new Labour leader David Cunliffe is starkly illustrated by his party’s bungled attempt to embarrass the Government over new minimum house deposit rates.

Mr Cunliffe has talked about putting Labour on a war footing. This week’s events show it is not on a war footing. It is in a deep slumber. …

It is six weeks since the bank announced a minimum deposit level of 20 per cent for most home buyers. You’d think in that time Labour would have been able to come up with a young family who’d been saving for several years and had had the dream of home ownership snatched from their grasp at the last minute. Instead the best the party could manage was a 23-year-old IT consultant who was not even sure he would live in a house, if he bought it. “If it’s good enough I could live in it, otherwise it could be an investment property,” said Kanik Mongia.

No criticism of Mr Mongia. Good on him for saving enough for a 10 per cent deposit on a $400,000 to $500,000 home.

But does Labour really want to portray itself as the party of upwardly mobile young property investors? And is it really prepared to undermine the integrity of monetary policy to give Yuppies a leg up?

It was a staggering own goal. They propose destroying the independence of the Reserve Bank so a 23 year old can get a bank to fund a $500,000 investment property for him. It would be difficult to find a more unsympathetic case to highlight.

Not only did they fail to find someone better, they had their leader railing against property investors in the same story as they are promoting one.

I’m reluctant to blame parliamentary staff for the failings of a party, but in this case the bungle should ring warning bells. I have to assume that Cunliffe wasn’t told that the photo op he was doing involved an aspiring 23 year old property investor. Surely he would have said no if he was told.

So this suggests that his leader’s office didn’t do due diligence on the person. They should have had a conversation with him and found out that he was thinking of using the house as an investment property.

At this early stage you can get away with errors like that, but going into the election you can’t afford to have such fuck ups.

Labour’s failure to find a more suitable “victim” for its campaign indicates that it is either out of touch with the issues or not well connected to the community it purports to represent.

However, the party’s fortunes will not be transformed simply by the leader performing better. The party must also do its bit. On this week’s evidence it has a long way to go.

Normally it is the Government that is happy when there is a recess as it means no question time. I’d say Labour should be very happy there is no Parliament this week, because they’d be getting a massive mocking in it, if there was.

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KFC and disabled workers

September 29th, 2013 at 9:00 am by David Farrar

The HoS editorial:

Work for the mentally disabled used to be provided in so called sheltered work- shops. These days, it depends on employers with a sense of social responsibility. They can give disabled people the dignity of a real job and semblance of personal independence.

One of those employers has been the fast-food chain, KFC New Zealand. Its staff included disabled people who could do basic tasks such as filling its side-order packs and cleaning. Last year it had a change of heart.

Its owner, Restaurant Brands, decided to review its costs and find ways to maximise the chain’s profitability. One way was to require all staff to be capable of doing any job in the store, from the counter to the kitchen. Soon, the disabled were getting notice.

I had no problem with KFC deciding that for future staff, they would have a policy that all staff be capable of doing any job in the store. There can be very sound reasons for such a policy.

But when they erred badly was applying the policy retrospectively to existing staff, and making redundant some long-term staff members (including disabled ones). It was insensitive at best and callous at worst.

The Herald on Sundayrevealed the systematic lay-offs of disabled workers at KFC. The anguish of these people and their families was heart-rending. One of them was a 48-year-old woman who had been packing potato and gravy at a KFC outlet for nearly 18 years. She loved putting on her uniform and going proudly to work, her sister said.

Loyalty is a two way ship, and if a staff member has been a diligent worker for 18 years, it is almost beyond belief that you would dismiss them just because they don’t quite fit in to your new ideal structure. A bit of flexibility is sensible. What the hell does it matter if in say a dozen of your stores you have one employee who can’t work as a server – but can work as a packer.

As I said above, no issues with KFC deciding for future staff appointments that they want people who can work in all positions. There can be very sound business reasons for doing so. But one could transition into such an arrangement by grandfathering in current staff.

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Herald on Labour’s home loan policy

September 26th, 2013 at 11:00 am by David Farrar

The Herald editorial:

Labour’s new leader appears to think he can manage New Zealand’s financial system better than the Reserve Bank. If he was in power now, he says, he would not allow the bank to include first-home buyers in its mortgage lending restriction to take effect from next week.

The bank is about to limit the amount of lending that retail banks can do on deposits of less than 20 per cent of the price of the house. It is acting out of concern that banks are becoming too exposed to the risk that another house price bubble will burst, causing prices to fall. If that were to happen, the consequences for banks might be costly but for low-equity first-home owners it could be catastrophic.

The little equity they have amassed could be wiped out, leaving them owing the bank more than their house is worth.

If that sounds bad enough, other policies espoused by David Cunliffe would make their position even worse. If elected, he says, Labour would exempt first-home buyers from the new lending limits until its capital gains tax took hold and its low-cost house building programme took effect.

Nothing would be more likely to bring about a fall in house prices than a capital gains tax and an increase in state housing. If Mr Cunliffe had the interest of first-home owners at heart he would not only limit their access to low equity loans, he would do so well in advance of his other proposals.

So Labour is joining the Greens in promoting policies to leave home owners with negative equity!

When it announced the proposed restriction the Prime Minister made it known the Government wanted an exemption for first-home seekers. The bank was unmoved, pointing out that first-home buyers were about 30 per cent of low-deposit borrowers and they had to be included if the measure was to be effective.

John Key gave way, deferring to the bank’s expertise in its statutory jurisdiction. The bank’s so-called independence in these matters has been in the bedrock of New Zealand’s economy for nearly 30 years. In that time its independence has been respected by both major parties in government and when they were in opposition.

Labour’s finance spokesman, David Parker, believes the party could exempt first-home seekers without removing the Reserve Bank’s independence; his new leader appears not to care whether the bank’s role is compromised or not.

The independence of the Reserve Bank has been a critical element of our economy. We should be very worried about promises to over-ride its decisions by politicians.

Mr Cunliffe needs to be very careful in this area. As the leader of one of the main parties, his utterances could be damaging to long-term confidence in the economy well before he threatens to be in any position to act.

It is hard to believe he would carry out the promise to over-ride the Reserve Bank’s independence to exempt first-home seekers, if only because of the obvious risk to their equity. He was looking to score an easy political point.

Anything that makes it harder for first-home seekers to get finance is bound to be superficially unpopular, as proven by a poll at the weekend. Political leaders who withstand this pressure and respect the Reserve Bank’s independence deserve more credit for it than Mr Key has received.

Governments are all-powerful in this country, it would be easy to weaken the bank’s legislated jurisdiction and do untold damage to our economy.

Mr Cunliffe’s stance is a worry.

Basically Labour are campaigning on cheap and easy credit – the very thing that caused the global financial crisis. We should be very wary.

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Dom Post on The Pope

September 24th, 2013 at 11:00 am by David Farrar

The Dominion Post editorial:

He prefers a Vatican guesthouse to the luxurious papal apartment occupied by his predecessors, he’s swapped a bulletproof limousine for a battered old runabout with 300,000km on the clock and he ducked a symphony concert organised in his honour because he had more urgent business. “I’m not a Renaissance prince,” he said.

The big tests are still to come, but six months after cardinals chose 76-year-old Argentinian cardinal Jorge Bergoglio to succeed Pope Benedict XVI as the head of the Catholic Church, it looks as if they made an inspired choice.

I agree.

Cardinal Bergoglio, now Pope Francis, might just be that rarest of creatures – a holy man. Not for him the trappings of wealth or the layers of intermediaries that separated his predecessors from the real world. One of his first actions as Pope was to call his newspaper vendor in Buenos Aires to cancel his delivery. Another was to call his shoemaker. “No red shoes, make them black as usual.”

And it is not just his personal style:

He has said he is not interested in judging people on the basis of their sexuality and has opened the door to a discussion about the possibility of married priests. He has also said the church’s focus on abortion, marriage and contraception is too narrow and is driving people away.

That does not mean the church is about to change its position on any or all of those issues, but it does indicate a new willingness to consider issues of importance to Catholics.

That can only be good for the church and a world desperately in need of goodness and compassion.

I don’t see a change in doctrine, as much as emphasis. But even a 2,000 year old institution does change with the times to some degree. In fact one of the massive design faults in religions like Islam is an inability to modernise because there is no central authority in the religion. Christian churches can and do modernise to reflect the changing world, hence why the Catholic Church no longer bans reprinting Galileo’s works.

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NZ Herald on charter schools

September 20th, 2013 at 2:00 pm by David Farrar

The NZ Herald editorials:

Initially it was going to fund charter schools – or “partnership schools” as it prefers – only in disadvantaged areas of South Auckland and Christchurch. But when applications were invited and evaluated, Education Minister Hekia Parata was sufficiently impressed to widen the pilot. This week, she and Act leader John Banks announced five applications had been accepted for schools in Northland and Albany as well as in South Auckland.

It is no surprise that three of the five are Maori initiatives, one in Whangarei proposed by the He Puna Marama Charitable Trust, one in Whangaruru by the Nga Parirau Matauranga Trust and one from the Rise Up Trust in Mangere. 

Charter schools in the United States have attracted most interest from minorities who feel mainstream education is failing them.

And in some states like New Orleans and DC, they have had a significant positive impact.

The schools will be obliged to teach the national curriculum which, thanks largely to Labour governments, is not very prescriptive about what is taught. They will want qualified teachers and the information they must supply for their state funding will surely be available. Labour’s and the unions’ real objection to charter schools is one of principle and power.

Equality in education, they believe, requires not only state funding but state management of schools, as well as state control of teacher training and, not least from the union’s point of view, national bargaining over teachers’ pay and terms of employment. Even in the US, teachers’ unions still fiercely oppose charter schools.

For much the same reasons – their grip on power is loosened.

As in the US, charter schools’ futures will depend on their educational ideas producing the desired results. These schools are just an extension of the idea that diversity is healthy, choice is fair and an element of competition never did a public service much harm. This can now be put to the test.

These schools will be under intense scrutiny for their use of public money. If they work, even for a small number of students, that money will have been well spent.

Yep. We should judge them on their results. They can get closed down (unlike a public school) if they fail to perform.

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Labour’s challenges

September 18th, 2013 at 12:00 pm by David Farrar

The Dom Post editorial:

Three days in the water and Team Cunliffe has struck its first snag.

The snag is the abdication of deputy leader Grant Robertson. Labour’s new leader and the party’s MPs, including Mr Robertson, did their best yesterday to put a positive spin on the surprise development.

MPs were “joining together” and “putting the party first”, Mr Cunliffe said.

The new line-up featuring finance spokesman David Parker as deputy leader was the “strongest” that could be put forward, said Mr Robertson, who has replaced Trevor Mallard as shadow leader of the House. However, the reality is that the new leader has lost an opportunity to heal the wounds created by the internal feuding that has bedevilled the party since its 2008 election loss.

Whether Mr Robertson declined overtures from the Cunliffe camp, as the bush telegraph suggests, or Mr Cunliffe preferred Mr Parker as his deputy is beside the point. If Mr Cunliffe did not offer Mr Robertson the job he should have.

After a three-way primary contest for the leadership laid bare the divisions between MPs, and the divisions between MPs and the wider party, Labour not only needs to talk unity, it needs to display it. The best way to achieve that would have been for the two main contenders for the leadership – Mr Cunliffe and Mr Robertson – to present a united front to the world.

I understand that if Robertson had clearly stated a desire to be Deputy, Cunliffe would have appointed him. But he was hesitant and not keen – presumably to keep future options open.

That may be an indication Mr Robertson is fearful of becoming entangled in the wreckage should the Cunliffe experiment capsize.

It may also be an indication that Mr Robertson has not yet abandoned his own leadership ambitions.

Whatever the case, Mr Cunliffe has grounds for concern.

Remember that while the members vote for the leader, it is the caucus that has the sole job of sacking one.

Team Cunliffe has successfully rounded the first mark but one hull is lifting out of the water and there are signs some of his crew are thinking about abandoning ship. Anticipate developments.

The best tweet yesterday was about how a capsized Mallard was sighted in San Francisco Harbour :-)

The Herald editorial:

Grant Robertson’s decision to spurn the deputy leadership does not bode well for the Labour Party under its new leader. David Cunliffe had intimated his support for Mr Robertson in the clear hope of reconciling the caucus to the result of the party election.

Mr Robertson, preferred by 16 MPs to 11 for Mr Cunliffe and seven for Shane Jones, had given every impression in the campaign that whatever the result he was unlikely to rock the boat. Now he is making waves.

His decision is a declaration that he does not wish to work too closely with the new leader. Instead he will be Labour’s shadow leader of the House, a role that may let him range widely of his own accord.

The decision suggests he has not put his leadership ambition aside for the time being. If he was content to wait he would have continued in the deputy role, an ideal position for keeping your name to the fore and proving yourself capable in the leader’s absences. But an ambitious and honourable deputy is also supposed to give the leader unconditional support. That perhaps was the obstacle for Mr Robertson continuing in a job he has reputedly done well.

It is hard to interpret the decision as anything other than a lack of confidence, and a desire to keep future options open.

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Public hygiene ratings

September 11th, 2013 at 2:00 pm by David Farrar

The Dom Post editorial:

Log on to the website of the Auckland Council, or its Palmerston North counterpart for that matter, and you can find a hygiene rating for every eatery in the city, plus the date it was last inspected.

Log on to the Wellington City Council website and you will see all sorts of information for restaurant and cafe owners but nothing for the public.

The Auckland and Palmerston North councils have decided that their first obligation is to the public, not business operators.

Wellington City Council is conflicted about where its loyalties lie. The council does inspect premises and does issue cleaning, repair and closure notices, but it does not maintain a public register of hygiene ratings, does not require eateries to display their ratings, as Auckland and Palmerston North do, and only reluctantly surrendered to The Dominion Post records showing which eateries had failed to meet minimum hygiene standards in the last financial year.

Absolutely this info should be on public display. You should not have to use LGOIMA to prise it out of the Council.

Most people would think that is information that should be provided to the public as a matter of course, but not Wellington City Council operations and business development leader Raaj Govinda. In a letter to the affected businesses last week, he said the council was “extremely reluctant” to provide the list and “has not done so willingly”.

The council was not in the business of “trying to close people”, he later explained. Fair enough.

No-one wants businesses to close, dining options to be reduced or staff to be put out of work. But no-one wants food poisoning either.

The best guarantor of business viability and patrons’ health is the publication of hygiene ratings. That way everyone knows what the rules of the game are and who is, and is not, playing by them.

It is surely no coincidence that in Auckland and Palmerston North, where ratings are public, the vast majority of eateries meet the highest “A” standard. They cannot afford not to when their customers know their competitors two doors down the road are also getting a top rating.

Absolutely. And maybe sites like Trip Advisor could link to the hygiene rating!

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The Press on English

September 6th, 2013 at 9:00 am by David Farrar

The Press editorial:

But perhaps it should not have been because widespread respect for English, following his steady, careful performance as minister of finance through the worst financial crisis of the past 80 years, has been growing. A complimentary remark by a respected American economist on English’s performance at a conference in Sydney recently, was not untypical and it prompted a highly regarded New Zealand economist, Matt Nolan, to comment: “This is not the first time I’ve heard people overseas sing Bill English’s praises [it is probably in double-digits now] . . . we have a finance minister who understands the issues and tries to communicate them clearly.”

English came to office with an economy that had already been in recession for almost a year, when the global financial crisis hit. He had a measure of luck – there was no housing bust and although there were nervous moments, the New Zealand banking system did not buckle. But English responded to the crisis pragmatically and skilfully, avoiding severe retrenchment but focusing determinedly on reducing government debt and balancing the budget. Contrary to opposition propaganda, the government did not bring with it any dogma or hidden agenda.

A shock could, of course, upset things. The balance of payments deficit and overseas debt continue to be relatively high and to cause concern. But English’s overarching goal of getting the Government’s books in order, which looked hopelessly remote five years ago, now seems achievable, if only by a whisker, next year.

No surprise that I agree. Bill English has had the most challenging circumstances of any Finance Minister, and done very well. On top of that he is pushing a micro-reform agenda across Government that is making a difference.

While David Shearer was ultimately brought down as leader of the Labour Party by his woeful public communication, the role of weak, ill-thought-out policy in his downfall has probably been underestimated.

It is a factor the three contenders for the Labour leadership – Grant Robertson, David Cunliffe and Shane Jones – do not seem to have cottoned on to. In the beauty-contest meetings held so far, they appear mostly to have been diverted by essentially trivial issues such as the so-called “man-ban” or by seeing how far they can go in outbidding each other in implausible left-wingery.

The Labour leadership contenders have, in some areas, moved to the left of the Greens. That takes some doing!

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The Press on CIRs

September 5th, 2013 at 11:00 am by David Farrar

The Press editorial:

When the act allowing for citizens initiated referendums to be held was passed in 1993, it provided that they could only be started after a petition to Parliament signed by 10 per cent of registered electors within 12 months.

The provision was designed to be, and has been, an effective deterrent to single-issue cranks getting their pet obsession on to a ballot paper. It means that anything that does make it to a referendum has some public support already.

It has not, however, prevented the four referendums held so far from being a waste of time and money. All four have produced the answer their proponents wanted and all four have, quite properly, been ignored by the governments of the time, both Labour and National-led.

People should keep asking those who claim a CIR should trump an election, when they will vote to amend the anti-smacking law in line with the 87% vote in that referendum.

The referendum is even more pointless than usual. Not only will it have no influence on the Government’s stance on the issue, it is also on a matter on which the Government undoubtedly gained a mandate at the last election – the fate of state assets was one of the foremost issues of the election campaign. The partial sale of state assets is, furthermore, an issue for which the Government will be answerable at the general election just over a year from now.

That is how it should be. You put up a policy at an election. You keep your word and implement it. You get judged on your record at the next election.

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Dom Post and Grey Power on flexi super

August 28th, 2013 at 1:00 pm by David Farrar

The Dom Post editorial:

Ohariu MP Peter Dunne already has one thing in his favour as he pushes for flexible National Superannuation: significant public support.

According to a Fairfax Media-Ipsos poll in February, 49 per cent of people would like to choose when they receive their state pension, with reduced or enhanced rates depending on the age they start drawing payments.

Certainly, Mr Dunne’s proposal, which the Government agreed to consider as part of its confidence and supply deal with UnitedFuture, breathes some fresh air into the superannuation debate. It is well worth the discussion kick-started by a Treasury scoping document issued on Monday. 

A more hysterical response from Grey Power:

Allowing national superannuation to start at age 60 would be a cruel poverty trap for people who are short of money, Grey Power says. …

“This latest idea from Peter Dunne is one of the more cynical, cruel and dangerous bits of stupidity I’ve heard in a very long time,” said Grey Power president Roy Reid.

“It will be a poverty trap for financially hard-pressed people already on low incomes who will be tempted to take an early but low pension with no hope of it ever increasing to the rate that people who can afford to wait until they’re 70 will get.”

Mr Reid says Mr Dunne is a typical MP who has no idea of what life at the bottom of the heap is like.

“It’s like offering a starving family a loaf of bread today, and every day hereafter if you take it now, or two loaves a day and a big box of sausages every day if you wait for 10 years to collect.”

Mr Reid says Grey Power will fight the Government if it takes up the idea – and it wants Mr Dunne out of Parliament.

My God, the hysteria. Grey Power obviously thinks elderly people are so stupid they can’t be trusted to make decisions about what is best for them.

if you are 60 and in bad health, the option of early retirement could be a massive advantage.

Of course there are potential problems, but we need a rational discussion, not mad rants.

I note also that the Grey Power President has declared he wants certain MPs to be defeated. So I hope Grey Power will be registering as a third party for the election campaign.

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Herald on Meridian sale

August 21st, 2013 at 2:00 pm by David Farrar

The Herald editorial:

The structural drawbacks have largely been remedied for Meridian’s part-float, as needed to be the case given that it is easily the largest of the three power companies on the Government’s privatisation list. The sale will involve instalment receipts that allow investors to pay for the shares in two bites while receiving the full dividend. The first instalment will be for 60 per cent of the share price, payable on application, with the balance to be paid in 18 months. This greater affordability is enhanced further by a minimum application of $1000 for the first instalment. There will also be a share cap for New Zealand retail investors, so they will know the top price they will pay in both instalments.

This approach is not unique. It was used for the float of Australia’s Telstra and, locally, by Ameritech when it exited its Telecom shares. In both cases, it answered a particular need to create a heightened attraction to potential investors. It is understandable that it should also be used for Meridian.

David Shearer was comparing this on TV to doing layby at Harvey Norman. Not sure why Labour would want to use such a positive analogy!! Many Kiwis do shop at Harvey Norman and love using layby to make big purchases more manageable.

It is important that many choose to become Meridian shareholders. On the broadest of fronts, a shareholding democracy is about reducing this country’s unhealthy emphasis on housing investment. 

The companies benefit also from the discipline and transparency of a market listing.

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Dom Post on OSH changes

August 12th, 2013 at 11:00 am by David Farrar

The Dom Post editorial:

It is a rare feat for a government of any hue to embark on changes to workplace laws that win the approval of employers and unions alike.

Labour Minister Simon Bridges has managed to achieve that with the overhaul of health and safety rules and regulations he revealed last week.

The package activates nearly all the recommendations from the Independent Task Force on Workplace Health and Safety, which was set up following the Pike River Coal mining tragedy.

The fact the measures have been broadly welcomed by the Council of Trade Unions and Business NZ is a good indication the task force struck the right balance between the need to reduce on-the-job accidents  and strangling businesses with red tape.

I think the key thing is the flexibility for smaller businesses, as a one size fits all prescription would be very bad,

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