Kiwiblog

An excellent editorial in the NZ Herald:

Sir Roger Douglas has departed the political stage again but he may have left another enduring monument in Act’s agreement with National this week. A law to cap increases in government spending could prove to be as effective as one of his great legacies of the 1980s, the Reserve Bank’s inflation target.

Like the monetary target, the spending cap will sometimes be honoured in the breach but the target is no less effective for that. When it is breached, there needs to be a good reason, and a credible path set to bring inflation back into line. So it will be for the fiscal cap.

I think many have under-estimated the political power the cap will have.

It is too easy, as the previous government proved, to take on ever larger commitments when business is booming, the workforce is fully employed and tax revenue is providing budget surpluses. The country hardly noticed that state spending was steadily becoming a greater proportion of the economy in the years that surpluses also enabled continuing reductions of public debt.

More generous medical subsidies, paid maternity leave, early education, interest-free student loans, higher public service pay rates, a “super goldcard” are not the kind of expenses that can be wound back when the business cycle turns down and revenue drops. They instantly become entitlements that a future government fears to threaten.

Exactly. And the sad reality may be that the days of debt fuelled 3%+ growth could be in the past for-ever. In a new debt-averse world, with Europe taking a decade or more to get its debt under control, we may never get growth again like we have had in the 1990s and 2000s.  We may need to get used to 2% growth being the norm. This is why we need to stop Governments from imposing costs on New Zealand we can’t pay for.

Ultimately, of course, a parliamentary majority can do whatever it wants in this country and no Parliament can bind the next. A statutory spending restriction can be breached and even repealed as readily as the Bill of Rights Act. That act requires the Attorney-General to alert Parliament to proposed legislation that would breach the rights enshrined. The public takes note, the government needs a convincing case to proceed in political safety.

Laws of such limited power should not be under-rated. The lack of any stronger sanction is a strength, it makes it harder for a future government to repeal a statute that can do more than keep governments honest.

And hopefully it will increase the financial literacy of the public. We will know how much more a Government is planning to spend over the baseline amount per capita.

National has been not much keener than Labour on a legislated spending limit but it is already living within the limit agreed with Act. The cap is a credit not only to Sir Roger who has long argued for it, but to the recently deceased director of the Business Roundtable, Roger Kerr, who maintained a lonely watch against rising public expenditure, and Don Brash whose brief leadership of Act restored its focus on economic fundamentals.

Fiscal responsibility is a prosaic, thankless contribution to public welfare but if government spending rises no faster than population growth and low inflation from here on, we should all be better off.

Absolutely. If you look at all OECD countries over the last fifty years, those who manage to have the state consume a lower proportion of GDP have on average much much higher economic growth than those with a higher proportion.

Now it is a balancing act of course. If the state only consumed 5% of GDP, then we’d probably have no publicly funded schools or hospitals. But the current level of state spending is the highest in our history, so I don’t think drawing a line at today’s spending level and saying real spending per capita should not increase beyond today’s level is if anything a little on the generous side.

The Dom Post editorial:

Among those most depressed on election night were probably many teachers, their trade unions, and school principals.

I’m not so sure about “many” teachers. Most teachers don’t give a stuff about politics and just want to get on with teaching. It is the teacher politicians who devote most of their energy to educational politics that would have been depressed, but they are a minority of teachers.

The first John Key-led government made a priority of ensuring children can read and write – the foundation for all later learning – and parents getting school reports in plain English.

Known by its shorthand name, national standards, the policy was steadfastly adhered to by Mr Key, who consulted educational experts before the 2008 election on what would make the most difference to the one in five children who leave school illiterate and innumerate.

The policy was equally steadfastly opposed by the primary teachers’ union and the Principals’ Federation, chiefly on ideological grounds.

Their biggest fear is that once data on how schools are doing under national standards is reported to the Education Ministry, it will be available to the whole community, which will learn which of the schools they fund from their taxes perform best.

Outraegous. I’m waiting for Labour to announce a policy that they will ban league tables not only for schools, but also for hospitals. It is appalling that Tony Ryall publishes which DHBs have the quickest times for A&E waiting times and cancer radiation treatment. Not all DHBs have the same sort of patients, and Ryall’s hospital league tables should be banned as they are unfair to the hospitals not at the top.

But it is criminal that up to 20 per cent of students leave school unable to read, write and do arithmetic.

Former Labour Party president and new Howard League for Penal Reform chief executive Mike Williams gets it: he is desperate to find literacy teachers willing to help prison inmates. Why would that be necessary if current education policy works as well as teachers claim? After all, those jailbirds went to school somewhere.

The NZ educational system works very well for the average student. However it works very badly for the bottom 20% and not that great for the top 10%.

If children who are failing can be helped to succeed by a different prescription – think kura kaupapa or Rudolf Steiner, for example – the trial is worth conducting to see what can be learned from it.

Absolutely. A great win for ACT and for New Zealand.

Today’s Dom Post editorial:

Labour has abandoned all hope of taking votes from National.

It is now targeting the Green Party’s support instead. That is the only explanation for its bizarre proposal to extend the in-work tax credit to families who are not working. …

Any policy that reduces the incentives for individuals to become self-sufficient should be treated with great caution. It is neither in the interests of beneficiaries nor their children for beneficiaries to become permanently disconnected from the workforce. Adults benefit from feeling useful. Children benefit from the example of seeing their parents take responsibility for themselves.

The in-work tax credit was created for a specific purpose. It should not be used to increase benefits by stealth.

It is worth remembering. If you have kids and are in work, Labour say they will give you an extra $10/week only. But if you are on a benefit with kids, then Labour will give you an extra $70/week.

All three major newspaper editorials have come out slamming Labour’s 1970s workplace policy. The Herald says:

It will not be easy to take the Labour Party seriously at this election if it comes up with any more policy like the one announced on Tuesday. To lift the level of wages in this country it proposes industry-wide wage orders.

Can you imagine it. The struggling corner dairy may suddenly be told that it has to pay its staff the same as the massive supermarket around the corner, even though it will force them to close.

The Labour Party would surely hesitate to propose this if there was much prospect of the party winning the election and having to put the policy into effect. Like one or two other planks in the party’s platform this year – notably the removal of GST on fresh fruit and vegetables – the policy is mainly interesting for what it says about Labour’s condition at present and how much younger members of the caucus have to learn.

Helen Clark would have never come out with such an unelectable policy. I agree with the Herald that the push for this has come from the newer MPs.

A strong economy needs to let employers prosper wherever they can and compete for the employees they need. Wages grow when employers need more people with valuable skills. A policy for productivity encourages more investment in productive activities, and better education to equip workers with adaptive skills. It does not put industries back in a straitjacket for unions’ sake. The country has been there.

It really is the Marty McFly policy.

A second editorial pouring scorn:

If wishes were horses, beggars would ride.

If living standards were determined by government decree, Labour’s new industrial relations policy would be a breakthrough contribution to an age-old debate.

Sadly for the low-paid workers Phil Goff’s party is trying to woo, wishful thinking has nothing to do with living standards.

The consequence of hiking the minimum wage from $13 to $15 an hour, as Labour is proposing to do, will be to deny more unskilled young job seekers the opportunity to get a foot on the job ladder. The consequence of telling international film producers it is our way or the highway will be for them to pack their bags. And the consequence of requiring all employers in an industry to offer the same minimum set of terms and conditions will be to ship more jobs off overseas.

It is arguably the great job destruction policy we have ever seen.

The only winners from Labour’s work and wages policy, unveiled on Tuesday, will be unions, which can expect a temporary increase in members and influence.

These are the same union that not only fund the Labour Party, but actually are members of it, and have significant voting rights with it?

Circumstances vary from workplace to workplace. To succeed in the global market, businesses have to be flexible. Rewards should be shared fairly, but the way that is done should be a matter for shareholders, managers and employees to work out, not bureaucrats in the new Workplace Commission that Labour proposes to create.

Oh it won’t be bureaucrats on the Workplace Commission. It will be full of former or future Labour MPs.

The Press editorial:

The Labour Party claims its work and wages policy, which it released this week, will boost the country’s economic performance and generally provide a better future for workers. That is very unlikely. The policy’s strange mish-mash of bureaucratic centralised wage-setting, legislated higher minimum pay and repeal of some of the present Government’s liberalising workplace reforms has gruesome echoes of the unlovely 1970s. Far from being a forward-looking policy, as the Labour leader, Phil Goff, has declared it to be, it recalls policies long thought dead and buried.

The policy has been welcomed by unions, as well it might be. It could well have been written by them.

I shudder at the thought of a union being able to go to a group of mates appointed by Labour and get them to set terms and conditions for an entire industry. Employers, no matter what their size or location or profitability, will suddenly have to comply with the dictates of this new commission.

According to Goff, the policy would help stem the flow of people to Australia. Given that the effect of much of it would be to price some jobs out of existence, quite how it would do this is unclear. Labour still does not appear to understand that it cannot legislate its way to prosperity.

It’s a basic concept, but one which seems alien to them.

Yesterday’s Dom Post editorial:

Should the mainstream media and its self-regulatory body become part of a government? Hell, no. Even the most democratic of administrations should be kept well away from independent media outlets.

Sadly for the Dom Post, the same day Labour released its policy which indicates their interest in doing exactly that, and merging the Press Council and the BSA, so that all media come under Government control.

Labour have spent three years blaming the media for their unpopularity. They just love the idea of being able to appoint people who can fine editors for not being “fair” to them.

The Press editorial:

As might have been expected, the Green Party has jumped on this incident to advance its campaign against exploration for oil in deep waters off New Zealand. This is just political opportunism. There can be no comparison between a properly run deep-sea drilling operation, far offshore and subject to rigorous environmental safeguards, and an accident in which a ship has hit a well-charted reef a few hundred metres off the coast. As the Prime Minister said, the only connection is that both are at sea.

How it hit such a well charted reef is yet to be determined. Hopefully there will be some accountability for what has happened.

Labour doesn’t seem to learn. I’m now awaiting their attack on Richie McCaw. The Herald reports:

Rugby-netball double international Louisa Wall is sticking up for fellow Labour MP Darien Fenton over her attack on the public “bromance” between the Mad Butcher Sir Peter Leitch and Prime Minister John Key. …

But Ms Wall, who is back in Parliament for a second stint as a list MP, said the comments were misinterpreted, and she shared the disappointment at Sir Peter’s support for Mr Key – despite admiring his work.

 ”We would have assumed Sir Peter was a working-class champion,” Ms Wall said.

Ms Wall, who is contesting the safe Labour seat of Manurewa, said “personal is political”, and Sir Peter could not endorse Mr Key without endorsing his policies.

For Ms Fenton, though, his broadcast utterances were political treason. That any member of the country’s working class could speak well of a “Tory” leader is anathema. Unthinkable. Unforgivable.

The Mad Butcher was shocked by her withering personal rejection and the attempt to denounce him for saying what he thinks. His former butchery business was also stunned by an inference some had taken that a Labour MP was calling for a boycott of the Mad Butcher stores, many of them in rock-solid Labour seats.

The Fenton comments would have been politically dumb and personally reprehensible at any time, given Sir Peter’s record for serving the communities the MP purports to represent.

But her timing, amid Sir Peter’s well-publicised but tentative recovery from cancer and the joy of all league fans at the Warriors’ late season success, was particularly damaging.

The Press has an editorial on Labour’s earthquake recovery policy:

Labour’s proposals are, at this stage, not much more than a fine-sounding wishlist. As one red-zone resident noted, the plans were “about as useful as wallpaper”. This is largely driven by the party’s poor showing in opinion polls.

Wallpaper can be useful, to be fair.

Unless there is more substance that Labour has yet to announce, some of them would raise more problems than they would solve. It is also difficult to see how some of them could be made to work. The gaping hole in the proposals is the lack of any realistic assessment of their longer-term impact on the public finances. And while Labour’s leader, Phil Goff, was scornful of the capacity of a “market solution”, he appeared to be oblivious (or chose to ignore) the potentially huge, unintended consequences of ad-hoc interventionism.

A centrepiece of Labour’s plan is the proposal to spend $230 million on “affordable” sections that would be sold “at cost” to 1500 red-zone homeowners. This would, Labour says, control cost inflation among private developers. Quite how the government buying sections, instead of private interests, would control any inflation in the market is not explained. Also, “at cost” suggests that Labour would subsidise the price of the sections, which means a few fortunate buyers would get sections they could not otherwise afford at the expense of taxpayers.

The most notable flaw in this proposal, however, is that it does not explain how the lucky 1500 would be chosen out of 6000 or so who can no longer remain on their land. Whether they were chosen according to some stated criteria, by a lottery or selected by some other method, a host of inequities would be bound to arise.

Perhaps they would go to those who can prove they voted Labour?

The Dom Post editorial:

But the new administration should think hard about another part of the convention. One protocol therein requires signatories to make the dissemination of racist and xenophobic material via computer systems a crime. It might also outlaw Holocaust denial and what some groups, deeming themselves to be persecuted, call “hate speech” online. The United States, the UK and Ireland have refused to sign that protocol. New Zealand should, too.

When states consciously choose to ban the traffic in ideas, they take a giant stride toward control of their populace. Freedom of speech – one of the pillars that buttress democracy – is its most potent when its practitioners advocate the unpopular, the unconventional, even the downright nasty.

Informed public debate, which of necessity includes ridicule and derision, is always the most effective antidote to racism, sexism, xenophobia … Banning criticism – as this protocol would do, at least in cyberspace – merely drives racists, sexists, xenophobes underground and gives them cause to claim martyrdom.

I blogged on this issue a couple of weeks ago. The answer to offensive speech is not to ban it, but to counter it.

It is timely to repeat a quote from Noam Chomsky:

If you believe in freedom of speech, you believe in freedom of speech for views you don’t like. Goebbels was in favor of freedom of speech for views he liked. So was Stalin. If you’re in favor of freedom of speech, that means you’re in favor of freedom of speech precisely for views you despise.

One of the few Chomsky quotes I love.

The Dom Post editorial:

It is inconceivable that the “cradle to the grave” social security system envisaged by former Labour prime minister Michael Joseph Savage resembled anything like the welfare state we have today. He dreamed of a temporary safety net to help those down on their luck when times were tough. What we have is a system in which 10 per cent of the workforce is on a benefit, 222,000 children live in benefit- dependent homes and thousands of 16 and 17-year-olds are being paid to sit around and do nothing.

It is a situation that cannot be allowed to continue and one which National is promising to fix.

And Labour is promising to oppose. The more beneficiaries there are, the more votes they get.

Criticisms that the measures are overly-harsh or interfering ignore the fact that there is something deeply flawed with a system that hands over cash to people as young as 16 without expecting something back in return. While there are job-search requirements, they are next to useless for young people without the basic skills needed to secure employment. Requiring them to get up to speed in literacy and numeracy or to undergo trade or other training is not punitive, as some would cast it, but designed to allow them a better path through life.

Taxpayers also have every right to expect that payments to 16 and 17-year-olds are used for the purposes they are intended. It is not a “nanny state” intervention, as some would claim, given the fact that by definition IYB recipients have lost the backing of their parents or been forced to leave home and turn to the state for support.

Nanny state generally is interfering with people whom are independent and restricting their choices. Putting some rules in place for those who rely on the state for income is not in that category.

Today’s Dom Post editorial:

Politicians are not above the law.

They should not seek to be. For the third time in six years the Labour Party has been found to have breached the rules governing election advertising. The Electoral Commission has referred the matter to police. They should prosecute.

The breach is not as serious, or wilful, as Labour’s 2005 misuse of $824,000 of public money to subsidise its election campaign.

Certainly not as serious, but arguably more wilful. In 2005 they could claim they honestly thought that anything paid for by Parliament was not an election expense. In 2011, there is no way they could genuinely hold that view.

It would appear that the only way to convince Labour politicians they too must operate within the law is to hold them to account when they fail to do so. In 2005 police mystifyingly opted not to prosecute prime minister Helen Clark’s chief of staff, Heather Simpson, for exceeding Labour’ election spending limit, despite receiving legal advice that a prosecution would result in a conviction.

I blogged at length on the 2005 investigation. I found a degree of incompetence that was disturbing. The Police in fact investigated the wrong offence and didn’t even understand concepts such as strict liability. They have a chance to redeem themselves now.

The latest offence is similar. Labour campaign spokesman Grant Robertson has attributed it to a difference of opinion between the party and the commission over what constitutes advertising. Labour did not consider the postcard advertising, in part because it had received prior authorisation from the Parliamentary Service, he said. That is an irrelevance as Mr Robertson, a bright, capable new MP of whom his party has high hopes, should know.

Grant would indeed know this. All MPs should know this. It has been made clear by the Electoral Commission.

That role is filled by the Electoral Commission which offers any individual or organisation seeking to produce electioneering material an opportunity to have it vetted in advance.

To find out whether its postcard complied with the law Labour had only to submit it to the commission. It did not do so.

And this is why it had to be referred to the Police. Labour had a chance to get an opinion on it, and simply decided not to.

The lessons of the past have not been learnt. It is time for them to be reinforced.

It is bad enough that the public’s hard-earned money gets squandered on political bumf by all parties. It is even worse that Labour cannot be bothered complying with the rules when it does so. It has trifled with the law long enough. It should be stopped.

The question for the Police should be what message will it send out if they do not prosecute? I believe it will mean that the Electoral Commission will be a lame duck, if the Police take no action.

The challenge for the Police may be in deciding whom to prosecute, as it must be an individual, not a party. But a proper investigation should establish who in Labour made the decision to publish them and not seek an opinion from the Electoral Commission.

The Dom Post editorial:

If any more evidence was needed that New Zealand’s creaking welfare system requires major reform, it was the news that gospel singer Alipate Liava’a drew the sickness benefit while training for a boxing match.

Mr Liava’a apparently has a form of tennis elbow that prevents him working yet, miraculously, it did not stop him going toe-to-toe with All Black giant Sonny Bill Williams.

The elbow was the latest in a run of poor health for Mr Liava’a, who was previously on the sickness benefit because of a problem with his voice. He says he would have told Work and Income about his fight with Williams, but he was too busy with his music and training I thto find the time.

Those who work for a living and whose taxes fund the $7.6 billion a year welfare bill will rightly be flabbergasted. It is difficult to decide which is worse – that Mr Liava’a saw nothing wrong with claiming a benefit intended for those too ill to work while preparing to take on a heavy-set professional athlete, or that his doctor honestly believed a dodgy elbow made him too infirm to get a job.

The doctor has some questions to answer also.

Unfortunately, it will give ammunition to those who hold the erroneous view that all beneficiaries are hopeless bludgers. That is not true. Many are genuinely too ill to work, and the mark of a civilised and compassionate society is how well they are supported.

It would be nice to do more for those who are genuinely not able to do any work at all.

Other recommendations are well worth considering, however. They include increasing the proportion of beneficiaries required to seek work from about a third now to more than three-quarters and cutting benefits for those who refuse to comply. Requiring solo parents to ensure their children attend school and have regular health checks, ensuring beneficiaries under 18 years old have a degree of adult supervision, and tying benefits for those with drug and alcohol problems to attendance at treatment programmes also have obvious merit.

Merit, apart from for those who gain politically from having as high a proportion as possible reliant on state support.

The Dom Post editorial:

The threat of industrial action from lawyers opposed to the expansion of the Public Defence Service is a self-interested attempt to stay hitched to a taxpayer-funded gravy train.

Despite claims to the contrary, talk of legal aid lawyers working to rule in protest at the changes is primarily motivated by the same reason behind most industrial action – money. …

It is not hard to feel some sympathy for legal aid lawyers caught by the changes. The vast majority are scrupulously honest, yet the whole profession has been punished for the greed and misdeeds of a few.

But the profession had plenty of warning that the Government was concerned about the rising cost of legal aid and should have put its house in order. The failure to do so left Mr Power with little choice but to act. The threat of protests against the PDS should be seen for what it is – a last-ditch bid to get him to change his mind, motivated by a looming loss of taxpayer-funded income. He is right to stand his ground.

It is somewhat ironic that a National Government is partially nationalising part of the justice sector, but I thinks the changes are necessary. The status quo wasn’t defensible.

The NZ Herald editorial:

The Labour Party’s annual congress held at the weekend should have seen some interesting new ideas. The party has been out of power for the best part of three years and another election is six months away. Polls put Labour well adrift of National, which is another reason to expect some bold thinking. Labour has little to lose.

But there were not enough interesting or innovative ideas from the party at the weekend, though the word innovative was heard frequently. Labour proposes to encourage research and development with a 12.5 per cent tax break. Leader Phil Goff reckoned this would increase private investment in R&D by $1.5 billion a year, especially in high-tech industries that would create jobs and exports.

How often have we heard this? This country has encouraged company research and development at public expense for years. One of the ways Mr Goff proposes to pay for his tax break is by cancelling the present Government’s incentive, worth $70 million a year.

So there are two parts to Labour’s policy. One is to increase the amount the Government spends on subsidising R&D, and the other is to change the way it is funded. National basically has a system where it picks “winners” who apply for grants or subsidies. Labour proposes a 12.5% tax credit than any company that spends over $20,000 can gain.

So both parties are saying they see a role for the Government in encourgaing R&D, but disagree on the level of funding and the method.

The latest to beat this drum is one of the country’s top scientists, Sir Paul Callaghan, who has been attacking the Budget delivered last week for its lack of high-tech investment. His prescription for economic success is very precise. It is not tourism, “a classic low wage activity”, not wine, “nice lifestyle but frankly the revenue per job is poor”. The future lay in technology. “If you look at the profile of high-tech companies in New Zealand you see some surprising strength,” he says. “We have the capacity of growing this sector significantly.”

But it is not clear what the Government should do beyond ensuring the country is equipped with up-to-date infrastructure for high-tech providers to use. There are fears that even in financing an ultra-fast broadband network the National Party might be exceeding its competence.

I agree with Sir Paul, that one of our industries for the future is and should remain high tech. The fibe to 75% of NZ programme should help that industry.

The best governments can do is maintain a reasonable public research budget balanced against all other calls on their revenue, and allow tax write-offs for the development of exportable products. To pretend that research and development assistance is the answer to the nation’s economic needs is not credible. It is an admission of a lack of better ideas.

I quite like the idea that maybe you tie tax credits to R&D which is used in developing exportable products. That would stop tens of thousands of companies reclassifying expenditure as R&D just to gain tax credits. If you had to link it to an export product, then fewer would qualify.

The Southland Times editorial:

Suffer the little children to come unto … a brand new Government minister, all of their own.

Labour Deputy Leader Annette King proposes that a senior minister – and also that must-have accessory that no minister should be seen without; a ministry – be created to co-ordinate and focus all that national goodwill we have towards our kids in a more coherent, rewarding way.

The immediate sniff is that what kids really need isn’t more bureaucracy to lumber around on their behalf.

I am sure kids around the country are celebrating that they mey get their own ministry.

Ms King says the new ministry’s job would be to make sure “that children are a priority not just in theory, but in practice”. This would clearly distinguish it from the agenda of the Families Commission and the Children’s Commissioner, which was to fatten them up to be baked into pies.

And the Children’s Commissioner is independent – can attack the Government. A CEO of a Ministry for Children can not.

Neither will it pass without public comment that Ms King proposes a minister and a department in advance of any new policy regarding what they would do. It is a terribly hard sell to convince the public that ministers and ministries are a good idea in and of themselves. Or that it’s one of those Field of Dreams deals. If you build the ministry, the smart ideas will come …

It reminds me of the Yes Minister episode – a hospital with no patients. Instead it is a Ministry with no policy.

The Dom Post editorial:

The $10 billion deficit for the first nine months of this year confirms, if confirmation was needed, that the last government made bad choices. At a time of plenty it chose to buy popularity rather than to save and invest for the future. Worse still, it created an expectation that the bounty would continue to flow in bad times as well as good.

Yep. Labour thought that the economy would never go into recession, ignoring that the tradeable sector had in fact been in recession since 2004/5.

It cannot – a point Prime Minister John Key and his ministers have been trying to get across in advance of next week’s Budget. New Zealand has to get back to living within its means. There are a number of obvious targets for a government looking for what Finance Minister Bill English has quaintly termed the “nice-to-haves”. They include the extension of welfare to families with incomes far in excess of the average wage, interest free student loans and the 65-year age of entitlement for superannuation.

I support increasing the age of eligibility for superannuation. It will happen one day also. But any increase would have to be signalled a good decade or so in advance, so don’t think any change to the age will help get the books back into surplus in this decade. Lifting the future age of retirement is important for the long-term sustainability of superannuation, but again that is a different issue to the shorter-term fiscal challenge.

Instead, Mr Key’s Government is taking aim at the KiwiSaver scheme introduced by its predecessor to tackle New Zealand’s chronically low savings rate.

Under the scheme, people who agree to set aside a percentage of their income for their retirement receive a one-off Government grant of $1000 and tax credits worth up to $1040 a year. The scheme has proved remarkably attractive. It now has almost 1.7 million members. However, Mr Key has classified it among the “nice-to-haves” and is signalling that the annual Government contribution will be reduced, probably halved.

He and his finance minister appear to believe the public will not be deterred by the change. If so, they are graduates of the same University of Spin and Hope as their Labour predecessors, who believed that scrapping interest on student loans would not increase the take-up rate. New Zealanders are not stupid. The year before loans were made interest free, 53 per cent of eligible students borrowed from the Government. By 2009 – the last year for which figures are available – that figure had increased to 71 per cent.

KiwiSaver membership involves sacrifices. Contributing the amount required to secure the maximum Government contribution means many members have to make choices between other “nice-to-haves” and even some essentials. However, they calculate that, together with employer contributions, the Government top-up makes the sacrifice worthwhile. Reduce the top-up and many will review their participation.

For most employees, they will still be getting a massive subsidy. Someone on $28,000 will still get around $2.50 into their KiwiSaver account for every $1 they put in. That’s a 150% return on investment compared to 10% most funds deliver. I doubt too many people will dump KiwiSaver becuase their return on investment is 150% instead of 200%.

Those who get most hard done by the Government’s changes are self-employed like me. As I pay both my employer and employee contribution, then I’ll personally be quite a bit worse off by the Government’s proposed changes. But I had been saving plenty anyway, prior to KiwiSaver, so to some degree the KiwiSaver subsidies were just a way to maximise my return. And the Government should be focusing its scarce tax dollars on those who most need it, not people like me.

The Government has a choice. It can encourage the current generation of workers to save more, or it can pander to the “grey” vote by maintaining the pretence that superannuation for all at age 65 is affordable when it is patently not. It cannot do both.

It has made the easy choice, not the right one.

The reality is the age does need to increase, but not until around 2025 by my calculations.

The Dom Post editorial:

National MP Tau Henare’s plan for a private member’s bill allowing shops to open on Good Friday and Easter Sunday will be the ninth attempt in 15 years to bring some sense to trading laws long past their sell-by date.

This time, Parliament should seize the opportunity to repeal rules which are archaic and riddled with anomalies to the point of being ridiculous.

However, there is little to indicate the Government will have the courage to lead the way.

If history is anything to go by, Mr Henare’s bill will be considered as a conscience vote and fail at its first hurdle, defeated by the usual – and unusual – alliance of Labour, National and Green MPs. Those who vote against it will do so on the grounds of guarding workers’ rights or protecting the sanctity of the most important festival in the Christian calendar – or, in some cases, both.

The unholy alliance of unions and churches.

The list of anomalies is as laughable as it is long. A person can buy or sell a house on Good Friday or Easter Sunday, when real estate agents are allowed to open, but they cannot buy a bottle of bubbly to celebrate – unless they get it from the vineyard on which it was made.

A garden centre can open on Easter Sunday, but not Good Friday – a rule ignored by many as the huge demand easily brings in more than the $1000 fine. Bookstores at airports, train stations and other transport hubs can open, but those in shopping centres must stay closed. Perhaps most glaringly of all, brothels can open on Good Friday and Easter Sunday to sell sex, but those with bars are breaking the law if they sell alcohol.

It is hilarious that brothels can open, but not bars. I wonder if the brothels can sell alcohol?

The usual suspects defend their decisions to ban employees from earning overtime on those days, on the proposition that employers are so evil and callousthey they will break the law and force employees to work against their wills.

On Twitter the other day I asked a Labour activist if he could name a single employer that has done this. I said I’ve worked for around 20 employers and none forced me to work against my will. He also was unable to name a single employer – saying none of his former employers had. But he insisted that it was widespread all the same. Never mind the lack of emperical evidence.

But this got me thinking. Wouldn’t it be useful if the Government or Dept of Labour did a random scientific survey of employees in retailers, to ascertain how many currently have employers who force them to work on days they don’t want to, and also perhaps to look at annual leave taking – do they get to choose when to take annual leave, or does their employer over-ride their wishes.

It would be a great boon to informed debate to have some good data about how employees and employers currently interact.

The NZ Herald editorial:

Most importantly, the frequent use of urgency suggests a lack of regard for parliamentary process. And if many governments have been guilty of succumbing to temptation over the years, National’s record this term is particularly poor. In its first two years in power, it used urgency for 331.5 hours, nearly double the time the former Labour Government sat under urgency in its full first term. In that time, it has pushed through 17 laws without allowing select committee examination. Labour’s figure was four or five each term.

As I blogged last week, use to skip sleof urgency just to extend the sitting hours of the House is not that big a deal, especially as National goes out of its way to preserve question time when in urgency.

When it is used to progress a bill through multiple stages at once, or to skip select committee, that it gets more problematic.

Various proposals have been put forward to reduce the use of urgency. Requiring a 75 per cent vote in Parliament before the select committee stage could be omitted for any bill is one of the more valid. Another suggestion is for more sitting weeks each year. But the total number of bills passed by National is little changed from that passed by Labour.

Changes to standing orders need, broadly, both major parties to agree. I’d like to see both National and Labour agree on changes, such as extending the sitting hours so that it reduces the need for urgency. This could be done by having more sitting weeks, by allowing the committee of the whole to meet in mornings, by being able to extend House hours in the evening etc.

The Dominon Post editorial:

Poor old Bill English. All the finance minister wants to do is sell things and all he ends up doing is bailing out failed private businesses.

Poor old taxpayers. They end up paying bills that run into the billions for those failures. …

Ideally, the company would be left to face the consequences of not reinsuring sufficiently and it would be allowed to fail.

However, that is simply not possible. AMI has more than 85,000 policyholders with 225,000 policies in Christchurch – about 35 per cent of the residential market in the city.

Ambiguity over whether claims on those policies would be fully paid out would make decisions on the rebuilding of the city difficult, and cause delay till AMI’s financial situation was clearer.

That, Mr English acknowledged, could have been several months away. Delays of that order would have disastrous consequences for the whole country, which needs to have the city functioning as normally it can again as soon as possible.

Sadly, I don’t think the Government had much choice.

I think there are lessons to be learnt here from both the SCF and the AMI collapses. They both were primarily based in one region, and with AMI especially, this has proven to be very unwise. People like to go with “local” companiees, but that means you are vulnerable to local shocks (literally). If your customer base is spread more evenly nation-wide, then you are better placed to survive.

The Herald editorial fails the most basic economics test. They say:

In these circumstances, the Government ought to be considering a tax levy for a limited term. The Greens suggest 1.5 per cent on annual income above $48,000 and 3 per cent above $70,000. All middle and higher income earners would feel they were contributing effectively. It is money they might otherwise be saving in the present climate. Put to the rebuilding of Christchurch, a levy could strengthen the faltering recovery of the whole economy over the next year or two.

A responsible government would not turn it down.

First of all, any so called temporary levy will inevitably be about as temporary as the Maori seats, or Muldoon’s temporary surcharge.

But now let’s dissect the Herald’s economci argument. They say a tax increase will strengthen the faltering economy. It will not. In fact it will do the opposite by sucking money out of taxpayers, meaning it can’t be spent.

The Herald suggests the tax increase would go to the rebuilding of Christchurch but it doesn’t work like that. Christchurch is going to be rebuilt regardless of any extra tax.

We’ve just avoided a double dip recession. Over time the rebuilding of Christchurch will boost economic growth – but this will not start for probably a year and stretch on for many years. In the meantime the loss of production from the earthquake will probably push economic growth negative, just as we narrowly avoided a double dip recession. We will never fully recover that loss of economic output, so I expect the economy to remain pretty weak until 2012/13. So again, it would be economic stupidity to increase taxes as we recover from the earthquake.

The Dom Post editorial today:

Mr Goff’s leadership should be over. The party he leads is bereft of energy and bereft of ideas. Instead of looking like a government in waiting it looks like a dysfunctional rabble. What confidence can the public have in its ability to manage the affairs of the country when it cannot manage its own?

Looking at how Goff has managed the last couple of weeks, you do have to wonder how he would have handled a global recession, finance company collapses, two earthquakes and Pike River.

However, speculation about a move to oust Mr Goff is just that – speculation. Labour has no obvious alternative. Shane Jones is still too closely linked to pornography in the public mind, David Cunliffe has had zero impact as finance spokesman, David Parker is unknown to the public, Mr Shearer is too inexperienced politically and so is another well-regarded newbie, Grant Robertson, about whom the party may have to consider another question at some point. Is New Zealand ready for its first gay prime minister?

For my money, I think Grant will become New Zealand’s first (openly) gay Prime Minister, and I don’t think his sexuality will be of relevance to most New Zealanders.

The Dom Post editorial:

Sometimes there are no good options; just choices between uncertain, least bad and bad options. Such is often the case for social workers dealing with the victims of child abuse. …

However, it is appropriate for Ms Bennett to reopen debate on the “whanau first” childcare policy implemented by the 1989 Children, Young Persons, and Their Families Act, as she did at the weekend. The central tenet of the act is that children should not be separated from their extended families, cultures and ethnic backgrounds except as a last resort.

It is a noble sentiment but one that sugarcoats a harsh reality. Child abuse is learned behaviour. Children who are abused are more likely to grow up to abuse their own children than children raised in loving homes. If a father or mother has been abused it is likely that their brothers and sisters were also abused. Placing the victims of child abuse in the care of aunts and uncles sometimes perpetuates the abuse. It can also make it easier for abusers to gain access to their children.

I think, sadly, the current approach is not working, in that too many children who get removed from their nuclear family, still suffer abuse with their extended family.

The Dom Post editorial calls on Phil Goff to choose principle over Peters:

As Winston Peters ponders the expense and bother of another tilt at Parliament, he will take heart from Labour leader Phil Goff’s equivocation on the subject of a post-election deal with the NZ First leader. Many voters will take a different view.

Mr Goff said yesterday that he had made no decision about a possible coalition with NZ First, but his other remarks were the verbal equivalent of throwing open the front door, handing Mr Peters the key to his liquor cabinet and inviting him to help himself to the whisky.

Heh, so true. And his line about how he won’t make a call until he knows if Winston makes it back is feeble – he made a call on Hone without knowing if Hone will be re-elected.

While Mr Goff has no doubts about Mr Peters’ reliability or trustworthiness, voters with longer memories do.

Mr Peters is, after all, the politician who railed against secretive big money donations to political parties then arranged for donations from wealthy backers to be funnelled to his party through a shadowy trust without the knowledge of fellow NZ First MPs or party officials.

He is also the politician who waved a sign saying “NO” in large letters when asked whether his party had received money from expatriate billionaire Owen Glenn, and who was subsequently found by the privileges committee to have “knowingly misled” Parliament over Mr Glenn’s $100,000 contribution towards his legal bills.

A verdict Labour to their shame voted against, despite evidence so strong it was well beyond reasonable doubt. Phone records shows Winston and Glenn on the phone, And around two minuites later Winston’s lawyer e-mailing Glenn asking him for money as discussed with his client a few minutes ago.

Mr Goff is desperate. He can feel the hot breath of ambitious colleagues on the back of his neck. However, it never pays to exhibit one’s desperation.

He would be better advised to put principle ahead of self-interest. Mr Peters’ unsavoury attacks on new immigrants and the politics of envy and fear he practises, are not compatible with Labour’s traditions.

This is what amazes me – Winston has spent his political career attacking Asians and immigrants, yet he is a hero to many on the left purely because he is also anti-National.

Prime Minister John Key has done the right thing by ruling out a deal with Mr Peters. Mr Goff should follow suit. It is not just parliamentary seats that are at stake but his credibility and judgment. There are times when leaders should forget political strategising and do the right thing. This is one of those times.

It won’t happen.