Another Green maths fail

June 22nd, 2016 at 2:00 pm by David Farrar

Nick Smith released:

Claims by the Green Party on contaminated sites expenditure expose how poorly they understand economics, Environment Minister Dr Nick Smith says.

“Their claim the Government has underspent on contaminated sites clean-up by $32.6 million involves basic accounting errors that raise serious questions about their economic competence.

“It is a nonsense for the Greens to claim that the transfer of $11.3 million for the Tui mine clean-up from the annual appropriations to a multi-year one is a cut. The funding is identical but a multi-year appropriation recognises a particular project may be spread over a number of financial years.

Maybe we should crowd-fund a Treasury secondee for the Greens so they don’t make such basic errors.

The MoU and the Art of War

June 8th, 2016 at 12:00 pm by David Farrar

Liam Hehir writes:

Labour and the Greens have signed a “Memorandum of Understanding” ostensibly committing both to cooperation in the service of changing the Government.

As the news buzzed around social media, you could be forgiven for thinking the Treaty of Waitangi had just been signed. That very night, Simon Dallow declaimed on the 6pm news that this “joint party power play is already changing the political landscape”. According to some cheerleaders of the Left, John Key’s fate is now all but sealed.

The thinking seems to be that Labour and the Greens are like Ross and Rachel, with the great voting public waiting eagerly for the resolution of the “will they or won’t they?” storyline. Now that Labour has finally committed to the nice guy Greens, a delighted electorate will finally be ready to make their own commitment to changing the Government.

Others think the agreement is a potentially serious blunder. In this narrative, the relationship upgrade with the Greens is an effective spurning by Labour of bad-boy Winston Peters. Because it’s generally considered that Labour won’t be able to govern without Peters’ support, the party’s decision to go with its heart and not its head may cost it dearly.

And in fact, Winston Peters does not seem particularly impressed with what Labour and the Greens have done, grumbling that his party doesn’t “like jack-ups or rigged arrangements behind the people’s back”.

As an aside, this argument is incoherent. By publicly announcing an intention to work together, Labour and the Greens are doing the opposite of going behind the people’s backs. What they are doing is arguably a lot more transparent than the standard New Zealand First method of refusing to state a preference until all the votes are cast and the backroom baubles auction is completed.

Hehir is right that Winston’s argument is incoherent.

So has Labour saved or doomed itself? Actually, the safer money is on the Memorandum of Understanding itself making zero to little difference one way or the other.

The One News Colmar Brunton poll shows that support for National and Labour went up and Greens and NZ First went down after the MoU was announced. But a one off poll change is not what matters – it is the long-term trend, and I doubt we’ll see much of an impact.

If the last half-decade or so has taught us anything, it’s that voters are about as indifferent to political minutiae as commentators are obsessed with it. As if to confirm this, the Greens themselves hailed the agreement as a “game changer” – a prediction that’s been wrongly affixed to any number of events and happenings since 2008 that were supposed to, but didn’t, bring about the end of the John Key era.

Issues that matter to voters are jobs, wages, schools, hospitals etc. MoUs far less so.

Greens claim on Waitara River baseles

June 8th, 2016 at 9:00 am by David Farrar

Stuff reports:

Green Party claims that the Waitara River is so polluted it is unsafe for bathers have been described as “baseless” by councillors.

Over the Queen’s Birthday weekend the Greens released a list of 10 rivers around the country that they claimed were now unsuitable for swimming.

The 10 included the Waitara, which the party said was affected by raw sewage spills.

So what are the facts:

“The Green Party’s facts are totally misaligned with reality,” council chief executive Basil Chamberlain said. 

“It’s sad for the community of Waitara who can right now swim in their river 95 per cent of the time.”

So that is 345 days out of 365 it is fine for swimming.

The council’s director of environment quality, Gary Bedford, said he could find “no factual base to the Green’s claims”.

Strong words.

“We test the Waitara River every week during peak bathing season and have found it swimmable for 95 per cent of the time,” he said. 

Bedford stressed that the council’s water quality data was publicly available and audited by Niwa to ensure its accuracy.

So who do you trust?

Greens want to ban new dairy farms

June 7th, 2016 at 12:00 pm by David Farrar

Stuff reports:

In February, Smith and Primary Industries Minister Nathan Guy released a consultation document on new measures to improve the management of New Zealand’s rivers, lakes, aquifers and wetlands.

Among the proposals were national regulations to get stock out of waterways, strengthening requirements on councils to set nutrient limits, standardised water permit conditions on the efficient use of water and minimising nutrient loss, and improved iwi involvement in council development of water plans and water conservation orders.

Smith said today, that the Greens were “late” to the party. 

“Our Government has done more than any in our history to improve water quality of our lakes and rivers. We introduced the first National Policy Statement on Fresh Water in 2011 and the standards framework in 2014.

“We have ramped up investment in river and lake clean-up from the $29 million spent between 2000 and 2008, under the Labour government, to $115 million between 2008 and 2015 and committed a further $100 million in Budget 2016,” he said. 

He said the Greens proposal for a blanket, nationwide moratorium on dairy conversion was a “blunt approach that will punish regions”.

“The more sophisticated approach, where limits are set on nutrients, addresses the environmental issue without blocking growth in exports and jobs.

“Dairy conversions are, under this Government, being declined for the first time in areas such as Southland and Canterbury, where they would exceed the newly established limits on nutrients.

The Green Party policy to ban every rural landowner in NZ from being able to convert their land to dairy is a totalitarian policy.

One of the marks of a free society is you can choose what to do on your land. It is in totalitarian countries that the Government decides for you.

Now if in specific areas, there are issues of water quality, then local authorities can deal with that by declining specific applications (which is occurring) or requiring any new dairy venture to have no impact on water quality. That is called a balanced approach.

The Greens however want to ban every rural landowner in New Zealand from being able to establish a dairy farm. They hate dairy, and they think they should decide for everyone how their land is used.

It’s a great reminder of how dangerous their policies would be, if they ever made Government.

So which one is the village idiot?

June 6th, 2016 at 12:00 pm by David Farrar

Paul Little writes in the Herald:

On a brighter note, Labour and the Greens are hooking up. Analogies to a marriage were quickly drawn at this exciting news, and they couldn’t be more apt. It was like when you hear that your cousin who everyone had given up on ever seeing hooked has finally got engaged, and then you find out it’s to the village idiot.

So which party is the cousin everyone had given up on and which party is the village idiot?

My pick is the Greens are the dateless cousins, as they have never got into Government. and that makes Labour the village idiot by default?

Shaw and Turei already disagreeing

June 5th, 2016 at 10:00 am by David Farrar

Newshub reports:

Metiria Turei appears to be at odds with her Green Party co-leader James Shaw on whether they would work with National, under questioning from Paul Henry.

Less than 24 hours after announcing a marriage of convenience with Labour, Mr Shaw and Ms Turei have given differing opinions on cooperation with National, should it get them into power.

Mr Shaw says the party’s first preference is Labour — hence yesterday’s show-and-tell of the two parties’ memorandum of understanding.

“When we’ve cooperated, both of our polls have actually gone up — and when we haven’t cooperated, we’ve tended to take votes off each other,” he told Newshub this morning.

“Preference” is the key word here — Mr Shaw wouldn’t rule out National altogether, saying it’s up to the membership.

But Ms Turei says it is “absolutely definitive” the party is committed to removing National from power.

“Our 100 percent commitment is changing the Government because they are so terrible for this country,” she told Paul Henry this morning.

So Shaw says it is up to the members while Turei says it is up to her and no way.

O’Connor not keen on Greens alliance

June 3rd, 2016 at 3:00 pm by David Farrar

The Herald reports:

Labour’s West Coast-Tasman MP Damien O’Connor won’t say whether he supports the new agreement between Labour and the Greens.

The two parties signed a memorandum of understanding yesterday. They’ve agreed to work together to change the Government, to co-operate in Parliament and to investigate a joint policy and/or campaign.

Mr O’Connor would not answer “yes” or “no” today when asked – seven times – whether he supported the memorandum.

I think we can take that to mean a no.

Gower’s Labour-Greens-NZ First Cabinet

June 3rd, 2016 at 11:00 am by David Farrar

Patrick Gower looks at what a Labour-Greens-NZ First Cabinet may look like.

  1. Andrew Little, PM
  2. Winston Peters, Deputy PM, Econ Dev, Immigration, Racing, Senior Cits
  3. Metiria Turei, Co-Vice-Deputy PM, Social Development, SIS, GCSB
  4. Annette King, Co-Vice-Deputy PM, Health
  5. James Shaw, Co-Vice-Deputy PM, Climate Change, Environment, Conservation
  6. Grant Robertson, Finance
  7. Phil Twyford, Housing
  8. Jacinda Ardern, Justice, Arts
  9. Shane Jones, Foreign Affairs, Trade, Fishing
  10. Chris Hipkins, Education
  11. Kevin Hague, ACC
  12. Kelvin Davis, Police, Corrections, Maori
  13. Ron Mark, Defence
  14. Carmel Sepuloni, OSH, Pacific
  15. David Clark, Tertiary Education, Science
  16. Fletcher Tabuteau, Primary Industries
  17. Julie-Anne Genter, Transport
  18. David Shearer, Tourism, Consumer Affairs, Commerce
  19. Tracey Martin, Local Government, Women
  20. Gareth Hughes, Energy, SOEs

So that is 10 Labour Ministers, five NZ First and five Greens.

Greens want Deputy PM

June 3rd, 2016 at 7:00 am by David Farrar

 

Stuff reports:

The Green Party has an eye for the role of deputy prime minister, if it finds itself in such a bargaining position, after the next election. 

And that would “almost certainly” fall to Metiria Turei, her co-leader James Shaw said.

Why not co-deputy PMs? You could have three of them – Grant, Metiria and James!

Speaking on Wednesday, Shaw said it was “entirely normal” the biggest party in a coalition would hold the roles of prime minister and finance minister. 

Not at all. There have only been two full coalitions – National/NZ First and Labour/Alliance. One of those had the finance role go to the junior party/

He denied speculation the move to confirm only Robertson’s portfolio in a potential Labour-Green government was to give the public an assurance the Greens would not be in charge of New Zealand’s finances.

Of course it is. The sad irony is that often Julie-Anne Genter makes much more sense than Grant Robertson on the economy. I’m not sure NZ businesses will be very reassured.

Based on current polling, however, any Labour-Green coalition Government would still likely need the support of Winston Peters and his NZ First party. 

Peters refused to say who he would back before the election. On Tuesday, he rubbished the agreement, calling it a “jack-up”. 

But he did reject the idea of playing “third fiddle” to Labour and the Greens. 

He does not sound keen.

On Tuesday, however, Labour leader Andrew Little was clear the party alliance was “not a monogamous relationship”. 

He would welcome any other party committed to changing the Government and advancing progressive policies.

But he refused to say whether he would leave the Greens out in the cold and form a government with NZ First if it had the numbers and Peters insisted.

Turei said the Greens worked well with NZ First and she had no concerns about being elbowed out.

These were different times, different parties and different leaderships than when Peters blocked the Greens from governing with Labour.

You keep repeating that long enough and you might start to believe it.

 

Trevett says deal may have handed National the next election

June 2nd, 2016 at 9:00 am by David Farrar

Claire Trevett writes:

It may indeed be historic but the agreement between the Green Party and Labour today may also effectively have handed the 2017 election to National on a platter.

Labour’s leader Andrew Little was at pains to emphasise the new memorandum of understanding between the two parties was “not monogamous”.

The trouble is that the one man needed to form Little’s Big Love government is NZ First leader Winston Peters and Peters prefers monogamy. …

It is certain there was some resistance in Labour’s own crew to the development. Little has made claims of supporting ‘middle New Zealand’ in recent times and the perception Labour is aligning too closely to the Greens risks undermining that.

There was a grin on Peters’ face after the announcement for a reason. Labour’s support base includes a significant chunk of working class voters who identify more with Peters than the Green Party. Peters will be betting he can scoop up some of that support from Labour. He has already begun, accusing both Labour and the Greens of selling out their supporters.

It is no secret Peters – and some Labour MPs for that matter – think the Green Party is toxic for Labour’s chances of Government. Nor is it any secret that if a Government can be formed with him alone, that is exactly how he likes it.

The only person who will be most delighted by today’s turn of events is one John Key, Prime Minister, whose chances of retaining that title just increased without him having to lift a finger.

Peters has recently said that he has never supported putting the Greens into Government, and isn’t about to start now. The best the Greens can hope for is a Labour-NZ First Government that throws them a few policy crumbs.

Watkins on the Labour-Green “deal”

June 1st, 2016 at 9:00 am by David Farrar

Tracy Watkins writes:

Is the Labour-Greens deal what they call the political equivalent of friends with benefits?  The agreement to join forces up to and including the next election campaign apparently comes with no strings attached. The deal foreshadows areas of joint cooperation and policy formation, and maybe even a joint campaign come the next election.

But once the votes are in, all bets are off. The Greens wore their heart on their sleeve at Tuesday’s announcement and talked up the certainty of a political marriage post-election. But with a resurgent Winston Peters lurking in the background, Labour leader Andrew Little was not prepared to commit.

The best reaction to the “deal” was from Steven Joyce:

Heh.

On that basis, Tuesday’s announcement may make sense. Voters now know that Labour plus the Greens adds up to more than Labour plus none. Labour is hoping that will be the game changer.

Yes, a real game changer that the Greens support Labour over National. This is a shockingly new development, just like it was in 1999, 2002, 2005, 2008, 2011 and 2014.

But Labour and Green voters probably had that equation figured in their head anyway. The voters who didn’t are more likely swinging National and NZ First voters. Little may have given them a powerful reason not to tick Labour any more. 

It paints Labour as going further left.

 

A non agreement

May 31st, 2016 at 4:37 pm by David Farrar

Stuff reports:

Labour and the Greens have announced a memorandum of understanding, to work together to change the Government.

Labour leader Andrew Little said it was time for a change.

“Labour and the Greens have reached agreement, common ground,” he said.

Labour’s relationship with the Green Party was strong and had reached a level of maturity that allowed this step, Little said.

He confirmed he would speak at the Green’s annual conference next weekend.

Green co-leader Metiria Turei said change was on the way.

The Memorandum of Understanding [MOU] would provide crystal clear clarity that was lacking at the last two elections, she told a joint press conference.

A joint approach would change the Government, Turei said.

The MOU included an agreement to co-operate in Parliament and investigate a joint policy and/or campaign.

Little said Grant Robertson would be finance minister in a Labour-Green government but no other discussions had been held over any other roles.

This is a Claytons Agreement. It has nothing of substance, or that isn’t already happening. The key thing is what isn’t in there – any commitment to have Green Party MPs as Ministers. And that isn’t there because they know Winston would veto it, and it is most unlikely they can govern without him.

The MOU is here. Basically it just says they don’t like National. The six commitments are:

  1. waffle on good faith
  2. co-ordinate in Parliament – already happens
  3. investigate joint policy or campaign – meaningless, as no actual commitment to do so
  4. No surprises policy – should already be the norm
  5. co-operate for local body elections – has been happening for last decade anyway
  6. meet monthly – already happening

Again there is absolutely no commitment to there being any Green Ministers at all.

 

Even Greens support scrapping Auckland’s RUB, but Goff doesn’t!

May 20th, 2016 at 3:00 pm by David Farrar

Bernard Hickey reports:

Green Co-Leader and Housing Spokeswoman Metiria Turei said the Greens were also open to Labour’s package of relaxed city limits, relaxed density controls and new infrastructure financing, as long as it included integrated planning with public transport and protection of special land.

“That deals with a lot of our general concerns about just freeing up land on the rural boundary to allow for more sprawl. On the face of it, it looks like something we could consider and support because it has all of the parts of the puzzle integrated. The devil is in the detail always, but we’re certainly interested in their proposal,” Turei told me, adding she was also open to the infrastructure funding idea.

“If this is a measure to help with the affordability question, then this is a measure that should be given some serious thought. With the housing crisis as it is, every idea needs to be explored. We can’t afford to dismiss any idea outright.”

Wow, not quite a total endorsement, but a real sign that that the facts are winning through in this debate – if you don’t allow for more land, then nothing else will work.

Auckland Mayoral candidate (and favourite) and Labour MP Phil Goff stopped short of endorsing Labour’s proposal for the abolishment of the RUB, saying other measures would have to be put in place to control growth or fund the subsequent higher infrastructure costs of housing developments well beyond the fringes.

“If you abolish them you’ve got to put other measures in place,” Goff said, referring to the bulldozing of farm land he had seen near Kumeu which he did not approve of.

“You have to have controls. You have to have a situation that if somebody wants to build way out of the city, the developer and therefore the property purchaser, will pay for the internal infrastructure — the streets and the water supply — but the Auckland ratepayers pay the cost of getting infrastructure to that area and the further out you go the more expensive it is,” he said.

“And unless you’ve got a user pays system in place there you can’t have open slather.”

Goff, as usual, won’t commit to anything at all. As other candidates release detailed policies, he seems to have none.

John Palino some weeks ago explicitly advocated scrapping the RUB. Labour has now endorsed Palino’s policy. But Labour’s Mayoral candidate will not.

Another Green-CDU coalition

May 12th, 2016 at 4:00 pm by David Farrar

DW reports:

Talks in Stuttgart have finalized Germany’s first Greens-Christian Democrats regional government. Chancellor Angela Merkel’s conservatives will be junior partners in Baden-Württemberg’s coalition.

The Green party state premier for Baden-Württemberg, Winfried Kretschmann, and Merkel’s conservative stalwart Thomas Strobl said their seven weeks of talks resulted in a deal, adding that they would present their cabinet on Monday.

Ministers were not named on Sunday, but they said it would comprise five Greens and five conservative Christian Democrats (CDU). The line-up will be finalized by May 12, when Kretschmann is due to be inaugurated in the Stuttgart assembly.

Hard to imagine this happening in NZ, not while the Greens have a policy that they will only ever support Labour.

Party donor named in Panama Papers – for the Greens!

May 11th, 2016 at 6:56 am by David Farrar

Stuff reports:

A Green Party donor has been listed in the database of the Panama Papers documents leak.

Kiwi rich-lister Forbes Herbert Elworthy was named in the offshore leaks documents, associated with a Singapore trust and entities in the British Virgin Islands.

Elworthy donated $15,000 to the Green Party in 2011 during the election campaign.

Now imagine if Mr Elworthy was a donor to National. The Greens would be indignant and decrying Mr Elworthy and saying that National is funded through people who use tax havens and avoid or evade tax, Labour would agree, and the media would all write long columns about how awful a look this is for National and John Key.

Shaw made clear the party were not against Kiwis having trusts overseas, they just wanted more transparency and disclosure on their details.

But Andrew Little says they are of no value and should be banned entirely.

“It’s not whether someone’s got a foreign trust, it’s whether they’re doing anything illegitimate such as tax avoidance, money laundering of anything like that,” he said.

First of all tax avoidance is not illegal. The Greens promote tax avoidance. Their policy to exempt electric cars from fringe benefit tax would lead to massive tax avoidance. They think that is okay so long as it tax avoidance for something they approve of.

Deborah Morris-Travers appointed Green Party chief of staff

May 6th, 2016 at 12:00 pm by David Farrar

Stuff reports:

Former NZ First Minister, now national advocate for Unicef Deborah Morris-Travers has been appointed chief of staff for the Green Party. 

She’ll fill the role left by the resignation of long-time staffer Andrew Campbell, who said he was departing to try something new. 

Campbell’s resignation was the latest in a series of high-profile departures from the party.

This is a good appointment by the Greens. Deborah was a good and effective Minister, and since leaving Parliament in 1999 has proven skills in the wider political arena.

Her biggest challenge may be internal, not external. Losing your three most senior staffers within three months is not a coincidence. Staff are frustrated with the decision making process within the Greens.

A third senior Green staffer departs

April 27th, 2016 at 9:00 am by David Farrar

The Herald reports:

The Green Party has lost its third senior staff member in as many months after chief of staff Andrew Campbell announced his resignation, saying it was time for “fresh legs” to take over his role after two elections.

Mr Campbell has held critical back-room roles in the party for the past five and a half years, first as chief press secretary and then as chief of staff after James Shaw took over the leadership from Russel Norman after the 2014 election.

It follows the resignations of chief press secretary Leah Haines for family reasons, and former communications director David Cormack who left after just six months in the role to set up a public relations company.

This will be a loss to the Greens. Andrew is very respected can capable. His move into Chief of Staff was seen as a good one.

Mr Campbell denied the string of resignations was due to discontent in the Green camp. “It’s the best job I’ve ever had. I love politics, I love elections but you get to a point where you need to take a break from it. That’s it in a nutshell.”

He did not yet have another job lined up but had made it clear to the Green Party after the 2014 election that he intended to leave, partly because he felt it was time for ‘fresh legs’ to take on the role after seeing the party through two elections.

Regardless of how you spin it, it’s not a good look to have your Chief of Staff resign less than a year after he takes up the role.

I don’t think it is due to internal discontent, more a realisation that the chance of the Greens getting into Government is pretty bleak. Even if there is a Labour-led Government, they’ll need Peters and he’d veto the Greens being Ministers.

Greens are the biggest jet setters

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

David Seymour has pointed out:

ACT Leader David Seymour is astonished to learn that the Greens have the highest expenditure on flights.
 
The figures come from the fourth quarter parliamentary expense reports.  It excludes ministers who have a much heavier workload, for example the Ministers of Health and Education must visit hospitals and schools, and are reported separately.
 
In October, November, and December the average Green MP spent $8,562 on air travel.  By comparison the average Labour MP spent $7,790, the average National MP $5,933 and the average New Zealand First MP $6713.
 
Sole Maori Party list MP Marama Fox spent $13,571, less than the Greens’ James Shaw ($14,425) and Metiria Turei ($13,852).
 
“Green MPs’ expenditure on air travel is extraordinary for several reasons,” said Mr Seymour.
 
“These are the MPs who regularly tell us that climate change is the crisis of our time and we must reduce our emissions.
 
“It is also extraordinary that they do not even have to serve electorates, as the Greens are all list MPs and have not won an electorate since 1999.  As an Auckland electorate MP I have to see constituents on Monday and be in Parliament on Tuesday, and back in the electorate Friday, practically every week. 
 
“As list MPs the Greens have far more potential to minimise their carbon footprint by flying less, but not only have they not done so, they are the most frequent flyers.
 
“Co-leader James Shaw loves to tell the story about how, as a consultant, he helped companies reduce their use of air travel.  The Green Party must be his toughest client.”
Heh.
The Greens say they offset the carbon footprint of their flights but that is still less than pure, as they criticise others for relying on offets rather than actually reducing greenhouse gas emissions.
As a party entirely made up of List MPs, you would expect their use of air travel to be far less than electorate MPs.

Greens maths

February 26th, 2016 at 4:00 pm by David Farrar

Stuff reports:

The Government has struck back at claims that controversial state-owned asset sales have cost more than $1 billion.

Green Party energy and resources spokesman Gareth Hughes said the party had not ruled out buying back Mighty River Power, Genesis and Meridian.

Oh good. A policy of asset confiscation will be just the thing to get National a 4th term.

The latest dividend figures showed the Crown had missed out on $945 million in dividends since listing, with a further $96m spent on the sales programme, he said.

The Greens are confusing foregone income with costs. They are not the same thing, as any stage 1 accountancy student would know. Also it is not foregone income.

Cameron Burrows, a spokesman for Finance Minister Bill English, said the Greens’ comments confirmed they did not understand how business worked.

“The share offer programme has brought valuable private sector discipline to public assets,” he said.

The Government now received more in dividends than it did when it owned the companies outright.

“For example, dividends from Genesis in the decade before the float averaged $32m,” said Burrows.

“This year, as a 51 per cent owner, the Government received $83m in dividends from Genesis.”

Yes, the Government is receiving more in dividends now with 51% than it did with 100%.

The Greens think ownership doesn’t matter and that 100% public ownership would have resulted in the same level of profitability and dividends. The history of the world is that ownership does matter. It is ridiculous to assume this level of profitability and dividends would have occurred under fully public ownership.

Hughes said it would only be a few more years before the total costs eclipsed the money raised.

No the Government is receiving more money now from its 51% share than it did from 100% share. It has more dividends, and reduced debt. A win-win.

National won the 2011 and 2014 elections despite the campaign against partial asset sales. The Greens think that somehow people will care in 2017?

“As ordinary Kiwis open their power bills this winter and see the price rising again, they’ll be asking, ‘how has the power company sell-off benefited me?'”

Electricity prices went up 64% or 7.1% a year under nine years of a left wing Government.

In the last three years electricity prices have gone up only 2.45 a year.

So in summary:

  • Smaller price increases than previously
  • More dividends to the Government
  • Less debt for the Government
  • More dividends for investors such as KiwiSaver funds

Looks like a great success story to me.

The Greens and Labour were criticised for releasing their NZ Power policy just before the companies were listed, which some commentators saw as an act of sabotage.

The resulting fears may have reduced final sale prices by hundreds of millions, meaning a substantially reduced return for taxpayers.

“That’s for commentators to speculate, and play hypotheticals on,” Hughes said.

It was an act of economic sabotage. But it backfired. While some investors were scared off, those who did invest (like me) made a large capital gain after the election – all thanks to Labour and the Greens.

Mighty River Power is trading at a 4 per cent premium to its $2.50 float price, despite touching $3.50 a year ago.

Genesis Energy has also pulled back from last year’s highs, but remains 21 per cent above its $1.55 float price.

Meridian Energy has been the star performer of the three, up 57 per cent from its initial price of $1.50, which investors paid in two instalments.

I purchased in all three. I invested for the dividends but thanks to the Greens and Labour I made a good capital gain also.

Greens on ETS

February 9th, 2016 at 11:00 am by David Farrar

Stuff reports:

An evaluation of the Emissions Trading Scheme shows the Government has “weakened the scheme to the point of ineffectiveness,” says Green Party co-leader James Shaw.

The Government released three technical reports last week, to help New Zealanders engage with a public review of the ETS. 

One of those, a Ministry of Environment report into the performance of the ETS, found it provided businesses nearly no incentive to look at how to reduce their emissions.

Shaw said that with expenditure of $40m on setting up the ETS, and despite it being the Government’s main policy for tackling climate change, it was failing.

“The ETS is supposed to provide businesses with an incentive to reduce their emissions – but two thirds of businesses no longer give any consideration to the ETS when making business decisions.

The Greens are correct that the ETS is not sending a price signal to businesses that will greatly impact production of greenhouse gas emissions.

But this is more due to the collapse of the global price of carbon after the failure of Copenhagen some years ago. The agreement in Paris may see prices rise.

The cost per EU unit was 30 Euros in 2006 but by 2007 had fallen to 10 cents.  So it is not just NZ that has had the challenge of a trading scheme with low prices.

However that is not to say local policy settings don’t have some impact. The 2:1 subsidy was needed to cushion the initial impact, but I think it is time for that to go.

Herald backs Greens costing policy

February 2nd, 2016 at 2:00 pm by David Farrar

The Herald editorial:

Amid the fanfare surrounding Labour’s education policy release at the weekend, it should also be acknowledged the Green Party has made a good start to the year, with a proposal that is reasonable, moderate and financially responsible.

The suggestion an independent unit should be set up within Treasury to provide costings of each party’s election policies is one the Government will find tough to turn down.

Much as it might like to, social policy initiatives from the Opposition can easily be dismissed as fearfully expensive without reliable figures – Labour’s free tertiary plan being a timely case in point.

Labour have a long history of under-estimating the costs of policies – interest free student loans and KiwiSaver ended up costing many times more than they originally said it would.

I support an independent costing agency, but one has to realise that there will always be assumptions which are debatable.

To cost Labour’s education policy, the first step is to work out what would be the cost if the Government paid all the tertairy fees for current students, instead of lending them money for them. That is quite easy to do, and uncontroversial.

The harder part is calculating how many more people will enrol if tertiary education is free. Labour say they think there will be a 15% increase. I think this is massively low. Tertiary providers will be able to earn $15,000 or so if they can sign up any adult who has never been to university (or other tertiary). They’ll be going through rest homes convincing retirees to enrol in courses.  It could well be a 100% increase.

An independent costing agency will have to try and make a “best guess”. This may be based on what has happened in other areas when something is made free – for example what increase has there been in public transport use by retirees since they got free travel. They may be able to look overseas. But even Treasury in the past has vastly under-estimated the cost of policies such as Kiwisaver and interest free loans. Humans respond massively to incentives, and this policy provides huge incentives to providers to sign people up.

The public would be best served if once a policy was submitted to the unit its findings were automatically made public.

Parties might not welcome the risk, and might withhold some proposals from an evaluation, but that would do nothing for their credibility.

The agency should be subject to the OIA.

 

Rob Hosking sums up the week

January 30th, 2016 at 7:00 am by David Farrar

Rob Hosking writes in NBR:

What a week.

The Greens embraced the Treasury.

National embraced public transport in Auckland.

And Labour embraced Jane Kelsey.

A great summary.

In sharp contrast, the Labour Party is jackknifing confusingly and messily all over the road over the TPP agreement.

The week closed with Andrew Little looking as though he had lost control of the issue, with two former leaders Phil Goff and David Shearer opposing his opposition to the TPP deal, and with Grant Robertson – Labour’s choice as Finance Minister in any future government – appearing on a platform with tenured university radical and free-trade opponent Professor Jane Kelsey.

Jane also opposed every FTA Labour negotiated.

But it has to be said that this week the Green party looked like the senior, rather than the junior party of New Zealand’s political left wing.

Not for the first time.

Grant Jacobs on the Greens pesticide policy

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

Grant Jacobs is a senior computational biologist at Otago University. He has a PhD in computational biology from Cambridge University (1992) and has also done post-doctoral work in areas ranging from the role of water molecules and genomics.

Dr Jacobs looks at the newly released Green Party policy on pesticides and points out the numerous ways it is not evidence-based policy.

In summary the failings are:

  • The report commissioned was seeking only information to back up Steffan Browning’s position against glyphosate based herbicides
  • The consultant is not a toxicologist
  • The evidence is not related to the question at hand
  • No sifting for quality
  • Not quoting sources of science summaries
  • No use of existing reviews

Dom Post on costing policies

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

The Dom Post editorial:

The Greens’ idea of an independent agency to cost parties’ new policies is a good one, and the Government should take it up.

I agree.

Prime Minister John Key has been dismissive so far, but he should remember that it is his side of politics that typically claims superiority when it comes to financial literacy.

“Show me the money!” Key famously called to former Labour leader Phil Goff during a 2011 election debate. It was part of a broader charge that Labour had wildly underestimated the costs of its policies during that campaign.

Perhaps he was right and perhaps he wasn’t. But if there had been an independent authority to give its own take, voters needn’t have taken Key’s word for it.

The parties of the left tend to always dramatically under-estimate the cost of their policies. This is why National should support such an agency. It would mean we would have credible estimates of what their policies would cost, and voters would better understand how much more in taxes would be needed to fund them.

The Greens will have mixed motivations for announcing their sober new policy. It would be straightforwardly useful to the party, for one, by handing it more resources to propose feasible ideas.

It is true parties can pay to have their policies costed at the moment but this is not independent. Normally a party hires an ideologically sympathetic economics firm to cost the policies using the most favourable assumptions. Hence they tend to greatly under-estimate the true costs.

If one was to set up such an agency, one could help fund it by reducing the funding for parliamentary parties in recognition of the fact they would no longer have to pay for their own costings.

More sophisticated policy from the small parties would be nothing to lament; consider that at the last election, NZ First promised to wipe GST off all food, which it laughably said was “fully fundable” by cracking down on $7 billion in tax avoidance.

NZ First had such outlandish policies they were in fact impossible to cost. They’re more slogans than policies.

Where the Greens have it wrong is to suggest the agency be a unit of the Treasury. That is no recipe for a truly independent institution; its budget, staffing and priorities might easily be massaged into oblivion by a minister eager to avoid embarrassment, or a bureaucrat happy to help with the same.

It should either be an independent advisory body to Parliament, or else made part of an investigative agency such as Audit New Zealand.

I think it should be part of Parliament. It could come under The Parliamentary Service, as the Parliamentary Library does.

An excellent initiative from the Greens

January 27th, 2016 at 10:49 am by David Farrar

Metiria Turei announced:

The Green Party has announced a policy to bring more clarity into the political system today, in Co-leader Metiria Turei’s State of the Nation Speech.

Green Party Co-leader Metiria Turei proposed the formation of the Policy Costings Unit (PCU), which would operate independently to cost the policy of political parties.

“New Zealanders deserve more transparency from their politicians so that they can better engage in the political system,” said Mrs Turei.

“That’s why the Green Party is proposing the establishment of the PCU, to provide independent costings for the policies proposed by political parties.

“The PCU would be an independent unit within the Treasury and available to all parliamentary parties. It would help cut through the noise of political party promises and deliver New Zealanders unbiased information.

This is an excellent idea, and something I have long advocated.

Politicians often release uncosted policies that would require massive take hikes to fund.

It is because of this, that the Taxpayers Union spent a lot of money hiring a top economist to cost the policies of major parties at the last election. We called it a bribe-o-meter. We found that that in 2014 the cost of policies proposed was:

  • National $1.4 billion
  • Labour $5.81 billion
  • Greens $6.54 billion
  • NZ First – impossible o calculate

Since the election I have kept a running total of demands for more spending by politicians, media and lobby groups. Since the 2015 Budget there has been an extra $11.7 billion in new annual spending demanded. This would require a top tax rate pf 87%!

So an agency to cost parties policies is an excellent idea. It would allow parties to get expert advice on the cost of a proposed policy and the public to them understand how much their taxes will have to increase by, to fund those policies.

My only quibble is that I would have the agency attached to one of the parliamentary agencies, so it is like the Congressional Budget Office in the US. Having it in the Treasury may open the Treasury up to (even more) partisan attacks if a party doesn’t like the costing.

I’m staggered National has rejected this proposal. They should be supporting it strongly. It would be a welcome step towards greater fiscal transparency and a better informed voting public.