NZ Herald on Labour’s $100 million get Winston on board fund

September 16th, 2014 at 9:00 am by David Farrar

The Herald editorial:

It was advertised as the Labour Party’s last big policy of the election campaign. When delivered, however, the plan to set up a $100 million-a-year sovereign wealth fund to invest in “strategic” assets, including clean energy, prompted only a scratching of heads. So small was it in size and so opaque was its intention that Labour’s motive was anyone’s guess. Was it meant to appease Winston Peters? Was it designed to appeal to the Greens? Was it meant for Labour’s left-wingers?

Either way, it was a policy that had little in the way of either substance or merit.

I have a much better idea. Let the economic geniuses of the Labour Party caucus mortgage their houses and assets and raise $100 million of their own money and they can then invest that in whatever assets they want, and let’s see how much money they have left after a few years.

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VSR vs OCR

September 15th, 2014 at 9:00 am by David Farrar

The Herald reports:

National’s Associate Finance Minister Steven Joyce said in May that the VSR wouldn’t be very effective. His rough calculations showed KiwiSaver contribution rates would have to rise six percentage points – say from 9 to 15 per cent – to have the same effect as a one percentage point rise in the OCR. …

However, Labour’s finance spokesman David Parker says he estimates that KiwiSaver contributions would have to rise just two percentage points to equal a one percentage point rise in the OCR.

This comes close to an outright lie by Parker.

A change to the KiwiSaver contribution rate will impact around $600 million a year. By contrast the OCR affects around $330 billion of lending. There is not an economist alive I reckon who would agree with Parker.

Again I remind people Labour deliberately declined the offer of a Treasury secondee who could professionally assess stuff like this.

Here’s what the Westpac Bank Chief Economist said:

However, we suspect that the VSR would not be particularly powerful. Our back-of-the-envelope calculations suggest that a one percentage-point hike in the VSR would reduce household consumption by just 0.2% of GDP. And in terms of the impact on inflation, a one percentage-point hike in the VSR would be equivalent to an OCR hike of between 10bp and 15bp.

David Parker is claiming an impact three to five times greater than Westpac has calculated. This is not a minor difference. This is a 300% to 500% difference. And this is not a complex calculation. The amount of money paid into KiwiSaver and generally on loan from banks is a known quantity.

I do not believe Parker’s figures are made in good faith. I bet you he can not produce a shred of a calculation to back them up. It is a con.

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Issues that matter – Health

September 12th, 2014 at 1:00 pm by David Farrar

cancer

 

In 2008 only 65% of people requiring cancer treatment got it within four weeks. Many had to go to Australia to get treatment. Today every DHB has 100% of people needing cancer treatment getting it within four weeks. Source: Ministry of Health National Health Targets.

smoking

 

The best way to reduce smoking, is for young New Zealanders not to take it up. In 2007 15.7% of 15 to 17 year olds were smokers. In 2013 this rate had reduced to 8.0%. Source: Ministry of Health Public Health Survey. Note I don’t think this change is not necessarily related to who is in Government, but think it is important to make the point that the trend is very positive.

surgery

 

In 2008 the public health system provided 118,000 elective operations. In 2013/14 it was 161,933. A huge increase of 44,000. Source: Ministry of Health National Health Targets.

Surgery Growth

 

From 2003 to 2008 the number of elective operations increased by 2,950 a year. Since 2008 it has increased by 7,368 a year. Source: Ministry of Health National Health Targets and National Party.

youthdrinking

 

Recall all the moral panic over youth drinking.  Well the Ministry of Health Public Health Survey shows that in 2007 19.5% of 15 to 17 year olds were hazardous drinkers and in 2013 only 8.1% were – almost half as many. Source: Ministry of Health Public Health Survey.

workforce

 

That’s 3,289 more nurses, 1,589 more doctors and 1,000 fewer health managers and administrators since 2008. Source: National Party Health Policy.

workforce2

 

This is the change in percentage terms. Source: National Party. A 17.8% increase in nursing numbers and 26.8% increase in doctor numbers.

ED

 

In 2008 only 70% of people in Emergency Departments were treated within six hours. In 2014 it was 94%. Source: Ministry of Health National Health Targets.

immunisations

 

In 2008 only 76% of two year olds were immunised (on time). In 2014 it was 93%. Source: Ministry of Health National Health Targets.

These are not abstract changes. These are changes that make a huge impact on people’s lives. Few things are more important than quick cancer treatment, shorter emergency department stays, more immunisations and more elective operations. Plus on top of that the youth rates for smoking and hazardous drinking has almost halved.

These are issues that matter.

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The left’s policies will put us back into deficit

September 10th, 2014 at 11:00 am by David Farrar

One News reports:

Labour leader David Cunliffe’s Capital Gains Tax is again under fire – this time from economists at the NZIER who say it won’t generate anywhere near enough money to cover the party’s spending promises.

Labour has over-estimated its capital gains tax numbers, according to a report by the New Zealand Institute of Economic Research. The report was commissioned by Federated Farmers, which strongly opposes the proposal.

Labour predicts a capital gains tax should raise $3.7 billion by 2026. But the Institute claims it’ll actually bring in less than half of that.

So who do we believe? The NZIEr is probably the (or one of the) most respected economics firms in New Zealand.

Labour on the other hand is the first opposition party in around two decades to decline the offer by Treasury to have a secondee in their office, who could credibly cost their policies for them.

It’s not a hard call.

And in related news, the Taxpayers Union has released a paper by Dr Michael Dunn analysing the likely fiscal impact of the Green Party wages policy. Dr Dunn is the former head of forecasting at IRD, so is an expert in forecasting.

The Greens claimed their wages policy will bring in an extra $800 million a year in tax revenue to the Government. Dr Dunn has calculated that in fact it would result in around $110 million less tax revenue every year, So that is a $2.7 billion hold in the Greens costings. We have a surplus projection of $300 million, so goodbye surplus.

The Greens and Dr Dunn agree that the direct cost of their policy on the Government will be $1.1 bllion over three years. Add on the reduced tax revenue and the total impact on the Government’s books is to leave the Government’s books $1.4 billion worse off – compared to their claim that it would be $1.5 billion better off.

These are not minor differences. These are billions of dollars. And just on one policy!!

I think it is time that we have what the US have, and a NZ version of the Congressional Budget Office which can independently cost policies proposed by parliamentary parties. NZers deserve better than to be conned by political parties that grossly mislead voters over the true costs of their policies.

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The fall and fall of Labour

September 8th, 2014 at 11:00 am by David Farrar

colmarbrunton

This graph was provided by Colmar Brunton on Twitter in response to a tweet.

Doesn’t it show a remarkable 10 year trend.

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Armstrong on Labour

September 6th, 2014 at 1:00 pm by David Farrar

John Armstrong writes:

Already struggling to make any impact, Cunliffe’s campaign has taken a potentially fatal knock. With two opinion polls yesterday showing Labour marooned at around 25 per cent and National registering at 50 per cent or more, the election campaign may effectively be over.

The only question now is whether growing backing for Colin Craig’s Conservative Party will translate into actual votes on September 20 and in sufficient numbers to clear the 5 per cent threshold – and thus allow Craig to come to the negotiating table with enough seats for National not to have to deal with Winston Peters.

While it is too late to gift Craig an electorate seat, it is likely Key will make some carefully worded statement in the final week of the campaign giving licence for potential National voters to tick Conservative.

The possibility of Labour being in a position to form a government now looks to be virtually non-existent. With two weeks still go, Labour’s campaign is The March of the Living Dead.

If they can’t cobble together a six party coalition, then the focus will go on the leadership. Will Cunliffe fight to stay on? How many List MPs will Labour lose?

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And another Labour candidate going off the rails

September 6th, 2014 at 10:00 am by David Farrar

The Timaru Herald reports:

The Labour Party’s Rangitata candidate, Steve Gibson, said yesterday he was “a bit tired of toeing the party line” which he said was “too respectful,” making a series of strongly-worded criticisms of the National Party.

Gibson said he was concerned about the “degradation of the public’s confidence in the democratic process by Judith Collins, Cameron Slater, Jason Ede and other rotten Shylocks”.

Labour party leader David Cunliffe put Gibson “on a last chance” in August for insulting Prime Minister John Key on Facebook, where Gibson called Key “Shylock” and a “nasty little creep”.

So he is back to calling people in National Shylocks.

Gibson criticised the National Party’s planned education reforms, which include differentiating teachers’ pay levels based on their responsibilities, as “just idiocy”, and said the party looked like “a bunch of dicks” for proposing the policies despite unionised teachers’ official opposition.

Actually the unions all welcomed it, when announced. The primary principals called it a game changer. The PPTA still support it. The NZEI has backflipped, because they seem to be a branch of the Labour Party.

Gibson is to appear at a candidates’ meeting on Wednesday in Timaru. He would not be answering questions from “obsequious, sycophantic scumbags”, which he believed could be written by his opponent, National’s Jo Goodhew.

Between Steve Gibson in Rangitata and Gordon Dickson in Selwyn, there seems to be something in the water down there. Or more a reflection that Labour’s support and membership has collapsed outside the big cities.

 

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Meet Labour’s Selwyn candidate

September 5th, 2014 at 5:20 pm by David Farrar

First go to Radio Live and see the e-mail Labour’s official candidate for Selwyn sent a journalist.  He even signed it as a Labour candidate.

Then in case you think it is a one off, go read his blog.

How the hell did he ever get selected as a candidate? Does Labour have no sane members in South Canterbury?

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On Labour’s Capital Gains Tax

September 3rd, 2014 at 1:00 pm by David Farrar

A parliamentary staffer notes to me:

Not sure how Cunliffe’s attempt to clarify Labour’s CGT squares with the summary below in their policy document, which doesn’t specifically exclude family homes owned by trusts, and in fact says trusts could not be used to avoid the CGT.

Excluding trust-owned houses from a CGT would seem to raise questions about whether different trustees of the same trust, who live in different houses, would be exempt from a CGT on a number of properties, which would become complicated and costly in terms of foregone revenue.

I also wonder whether Labour’s revenue forecasts were counting on homes held in trusts being included? After all David Cunliffe has said their Capital Gains Trust will lead to families and businesses paying an extra $4 to $5 billion a year in tax.

In Labour’s policy summary their exemptions are:

Exemptions: The family home, personal assets, collectables, small business assets sold for retirement and payouts from retirement savings schemes, including KiwiSaver, will be exempt.

It is not at all clear whether this exemption includes family homes in trusts. I expect the IRD will need to hire hundreds of new staff to deal with such a complex CGT.

I support NZ having a Capital Gains Tax, so long as income and company tax rates fall to compensate. But the CGT should be like GST – with almost no exemptions. Labour’s one is so complicated even the guy who designed it (Cunliffe was Finance Spokesperson when Labour adopted it) doesn’t know how it works.

Rob Hosing at NBR also makes a good point. He states that property speculators are already taxed if they buy and sell property to make capital gains. He gives an example of how someone in Auckland who buys a house for $750,000 and sells it a year later for $900,000 will pay (probably) 33% of the $150,000 profit if they are a property speculator.

Under the current law their tax bill would be $49,500. Under Labour’s Capital Gains Tax they will pay just 15% on their capital gain, so just $22,500 in tax.

Now it is hard to prove someone is a property speculator but National gave the IRD $6.65 million to enforce the current law more vigorously and this lead to an extra $57 million in tax revenue from property speculators.

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Labour joins National in promising a flag referendum

September 3rd, 2014 at 9:00 am by David Farrar

Stuff reports:

Labour would also review the design of the New Zealand flag, with the party saying “the time has come for a change and it is right for the issue to be put to the public”.

“We would however support the ability of the RSA and similar organisations to continue to fly the current flag if they so wish. New Zealand changed its national anthem from ‘God Save the Queen’ on a gradual, optional basis and that process worked,” the policy statement says.

Prime Minister John Key has also already announced a referendum would be held on the flag in the next parliamentary term, saying it was his personal preference to see it changed.

This is good. It means that New Zealanders should get to have a vote on the flag, regardless of who wins the election.

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Heffernan says Labour’s power policy is nationalisation

September 2nd, 2014 at 11:00 am by David Farrar

The Herald reports:

Doug Heffernan is not a fan of what Labour and the Greens plan to do to the electricity sector.

Dr Heffernan retired last Friday as chief executive of Mighty River Power after nearly 40 years in the industry, during which he witnessed radical structural changes.

He worked for the New Zealand Electricity Department and its corporatised successor, ECNZ. He was chief executive of Power New Zealand, before the local power companies were split into lines and retail energy businesses.

And he had been chief executive of Mighty River Power since it was carved out of ECNZ as a state-owned enterprise and latterly as a listed company under the mixed-ownership model. …

Under the NZED central planning model, nearly every generation investment decision was a bad one, he said, citing Marsden B (built to run on oil but which never generated a single kilowatt hour), the Clyde Dam with its massive over-runs and Huntly, designed to run on coal but which spent most of its life gas-fired.

“I’m old enough to remember the shortages in the 1970s because someone made the wrong decision about what plant to run. Same thing happened in 1992. We actually ran out of electricity,” he said.

California also has a single buyer model and they are warning they may need blackouts.

“That is what has surprised me over my career. To go from a position where you think the smartest brains would work out the best thing to do, to a system where a diversity of thinking has created far better outcomes.”

Dr Heffernan sees the single-buyer model as a form of nationalisation. “They say, yes, it is someone else’s capital but we will control the outcomes. That’s equivalent of having nationalised the industry.”

Of their many bad policies, this is arguably the worst. Even the man they cite as the inspiration for the policy, Frank Wolak, has lashed it as being a very bad move.

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More media on Labour’s shambolic housing policy launch

August 29th, 2014 at 7:00 am by David Farrar

Patrick Gower at 3 News reports:

What is wrong with David Cunliffe and the Labour Party?

Labour is going backwards when it should be going forward. That means something is seriously wrong with its campaign. …

And here’s one of the reasons why – Labour’s campaign is listless, meandering and shambolic.

The media with him say it’s a bit of a shamble and have been reporting on it. …

I took a look at Cunliffe’s campaign myself in Hobsonville yesterday.

Hobsonville quickly turned into campaign trail bizarro-world.

Cunliffe was out there to counter-attack on housing after Key trotted to the very same streets earlier in the week.

Cunliffe and housing spokesperson Phil Twyford re-announced the party’s Kiwbuild policy, saying Labour could build a $485,000 two-bedroom terraced house for $360,000 because of economies of scale.

But they didn’t have a house as an example, they were just standing on the street.

Twyford was saying there were heaps of examples of the $485,000 homes in Hobsonsville, but he didn’t know where they were and never got back to me with an address.

I can tell Twyford where one is – it’s just around the corner, a $450,000 two bedroom – I know because Key took us there on Monday.

Then they rolled out two first home buyers, Harrison and Jordy, who bagged National’s Homestart policy.

But under questioning they weren’t first home buyers at all, they weren’t even looking.

In fact they wouldn’t even buy a house under Labour’s policy.

Then it turned out that they were members of the EPMU, and they stopped answering questions when asked if they voted in Labour’s leadership campaign last election.

And despite the policy being around since David Shearer was leader, Labour still couldn’t come up with simple lines like when the first house will be built.

Labour seem to think photo ops are all they need to do, and that the media won’t ask for details. It’s good that the media are asking for details of a policy which will see the Government borrow $3 billion a year or so. Also good that they are asking for affiliations of people trotted out by Labour.

Felix Marwick at NewstalkZB is on the same tune:

It’s fair to say Labour’s re-launch of its KiwiBuild policy in Hobsonville on Wednesday didn’t run exactly smoothly.  Labour was looking to promote a specific part of its policy; two bedroom housing it claimed could be built 120 thousand dollars cheaper than under current government programmes.  They couldn’t show us a house. Nor could they initially say exactly how many of the houses would be built under the KiwiBuild approach. Finally the tame talent, which they’d brought along as an example of who would benefit from the policy, weren’t actually looking to buy a property just at the moment and wouldn’t even be able to immediately do so under Labour’s proposed initiative.

Again this will see taxpayers being exposed to $3 billion a year of borrowing for a policy which appears to be only slightly more advanced than an idea on a napkin.

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Labour’s aspiring home owners not actually looking to buy

August 28th, 2014 at 2:00 pm by David Farrar

The Herald reports:

David Cunliffe is backing the party’s choice of a couple used as a case study for Labour’s housing policy, after the pair conceded they weren’t actually looking to buy.

But one of them is a member of the Labour affiliated EPMU, so they’ll do!

Mr Cunliffe introduced Jordy Leigh, 20, and Harrison Smith, 22, as “a young couple who make about $75,000 a year”.

Not bad for so young.

Ms Leigh said they were currently living with her parents and although they had “had a look at houses in the Auckland area” she conceded they weren’t actively in the market to buy.

Twyford could not point out one of the properties he was talking about, saying they were scattered through the development.

The party could also not say how many $360,000 homes would be built.

“We haven’t actively been looking for a home to buy in the near future – that’s definitely not our goal – our goal is to have a home in a few years. We’re trying to start a family.”

Stuff points out:

However, Leigh, an EPMU union member, said their first home would still be out of reach even under Labour.

National’s policy would help only with the deposit and she and Smith couldn’t meet mortgage repayments.

“So, we haven’t been looking actively for a home to buy in the near future, that’s definitely not our goal,” Leigh said.

“Our goal is to have a home in a few years … not actively looking but aspiring to have our own home. We would not be able to get one next year. Under KiwiBuild we would have to wait a few years.”

Cunliffe shrugged off the gaffes and told reporters he wasn’t worried about Labour’s campaign.

What were the gaffes?

Twyford could not point out one of the properties he was talking about, saying they were scattered through the development.

The party could also not say how many $360,000 homes would be built.

So they could not point to a single specific house and say this is what they would build for $360,000 and can not say how many they could do for that price. It’s almost a con.

Nick Smith also points out the reality of Labour claiming 10,000 houses a year:

“KiwiBuild is a joke because Labour has no idea how it would build 10,000 homes a year, cannot explain how they would pay for it and they still have not worked out who would be eligible for the homes,” Dr Smith says.

“Launching the policy in Hobsonville only served to highlight Labour’s previous failings.

“Labour in government announced a 1600-home development on this land in 2002, but by 2008 had no planning approved, no resource consents, no infrastructure built nor a single house constructed.

“If they couldn’t build 1600 houses in six years, how can they promise 10,000 a year now under KiwiBuild?

As I said previously, if they do win it will be hilarious watching the excuses.

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Labour claims they can build Auckland homes for $360,000

August 27th, 2014 at 3:55 pm by David Farrar

The Herald reports:

Labour would be able to offer first home buyers two-bedroom properties in Auckland for as little as $360,000 if elected, party leader David Cunliffe announced today.

Labour’s KiwiBuild policy would build 100,000 new, affordable homes over 10 years and sell them at cost to first home buyers, Mr Cunliffe said.

“Using the purchasing power of the Government and off-site building techniques we will be able to lower the cost of building a home.

“This will enable Labour to sell a new two-bedroom terraced KiwiBuild home for around $360,000 in some parts of Auckland.

“That compares to around $485,000 for a similar Hobsonville home.” …

Labour’s housing spokesman Phil Twyford said KiwiBuild would deliver the equivalent of a Hobsonville $485,000 two-bedroom terrace home for $360,000 by forgoing the developer’s margin on the land cost-saving $36,000 and a further $89,000 would be saved by using off-site manufacturing, bulk buying building materials and reducing builders’ margin through high-volume tendering.

If Labour do win the election, it would be amusing to see them actually try to implement the policy and the excuses they’ll come up when the homes cost way way more than that. Maybe they’ll blame the unions for pushing the price of labour up!

Socialist parties always think that the state can provide things cheaper if you get rid of the profit margin, and economies of scale. But, you know what? The history of the world is they almost never do.

By this logic, we would all have much cheaper food if the Government owned all the farms. Think how much cheaper our food would be if farmers did not make any profit from the land, and instead the Government just employed them all directly?

And think about how much cheaper our food would be, if the Government centrally purchased all agricultural supplies for farmers. It would reduce the cost of farming massively, and hence food.

How about this for a challenge to Labour. If they really think they can produce two bedrooms houses in Hobsonville for $360,000 at no loss, then why don’t they promise to reimburse the taxpayers for any homes they build that cost more than that? Why should it be our money they gamble with?

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Labour’s latest billboard

August 27th, 2014 at 12:43 pm by David Farrar

Owly Images

This is not a parody. Iain Lees-Galloway posted it.

Good to have them be honest about the impact of their pro-union policies.

UPDATE: For the terminally stupid, this was a graphic posted to the Internet by Iain Lees-Galloway, not an actual physical billboard.

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Has Labour’s bribe backfired on them?

August 22nd, 2014 at 9:00 am by David Farrar

The Herald reports:

Labour’s support among the elderly has slumped despite making free GP visits for pensioners the centrepiece of its election campaign launch recently.

A breakdown of the party vote according to age suggests a dramatic fall from 29.3 per cent among pensioners in last month’s poll to just 17.6 per cent in today’s poll.

Once the poll results are broken into age groups they are simply indicative.

But what makes the movement more credible is that New Zealand First, which assiduously courts the grey vote, has gone from 4.7 per cent support among the over 65-year-olds last month to 8.9 per cent of the older vote in today’s poll.

We can estimate how significant these changes are.

We don’t know how many over 65s were in the poll sample of 750, but let’s estimate 200.

A fall from 29.3% to 17.6% has a 99.3% chance of being a true fall, and only a 0.7% chance of being just random sample differences. So it is safe to conclude Labour has fallen in support from over 65s despite their bribe.

An increase from 4.7% to 8.9% has a 94.8% chance of being a true increase, so it is likely they have gained support from over 65s.

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Greens and Labour in Canterbury

August 18th, 2014 at 6:04 am by David Farrar

Georgina Stylianou at Stuff reports:

Cantabrians appear more likely to vote Green than people anywhere else in the country, a new poll suggests.

Data from the stuff.co.nz/Ipsos political poll shows the Green Party gained 8.8 percentage points, according to surveys done at the start of this month, putting the party on 21.2 per cent support in Canterbury against a national average of 11.3 per cent. …

 Labour lost traction in Canterbury for the second month in a row, with the latest data putting it on 14.2 per cent, down 10 percentage points. Last month, Labour lost 3 percentage points while National gained the same amount. National is polling at just over 55 per cent – down 4 percentage points from July – of the Canterbury party vote. …

Right-wing blogger and commentator David Farrar said the Greens and Labour had been competing for the same votes.

At a regional level, the data had a higher margin of error so to “say Canterbury is more Green . . . will require them to stay at that level for another month or so,” Farrar said.

Only 108 people in the poll were from Canterbury. That is a 9.4% margin of error

Greens went from 12.3% to 21.2%. There is a 94.7% chance their vote actually lifted.

Labour went from 17.2% to 14.2%. There is a 71.1% chance their vote actually dropped.

There is an 89.1% chance that the Greens are actually polling higher than Labour in Canterbury.

So none of these are at 95% confidence, but they are more likely than not by some distance.

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Labour’s Auckland Council policy

August 15th, 2014 at 12:00 pm by David Farrar

Cameron Brewer points out:

Labour leader David Cunliffe’s tough talk today around future local government amalgamations does not hide the fact that Labour’s 2011 policies to overhaul Auckland’s “over centralised and corporatised  super city” have all been dropped, infuriating those on the Left hoping for further changes, says Auckland Councillor Cameron Brewer.

“Mr Cunliffe’s roaring like a lion about proposed and future local government amalgamations, but when it comes to further reforming the super city structure that Labour promised three years ago, he’s turned into a big pussycat.”

Mr Brewer said in 2011 Labour’s manifesto vowed to “fix the super city’s democracy” including enshrining local board powers, replacing the Independent Maori Statutory Board with elected Maori seats, abolishing “a corporatised” Auckland Transport, and reviewing all laws and structures pertaining to Auckland Council’s governance and democracy. Back in 2011 Labour was also promising to tie in central government plans with Auckland’s priorities by promising to establish a “Common Accountability Platform for Auckland”.

“Labour’s policy pertaining to Auckland Council this election has been watered down to absolutely nothing which rest assured will be upsetting a lot of centre-left local body elected representatives,” he says.

“Labour shouts that it does not want another Government-imposed corporate-like model like Auckland’s, however Mr Cunliffe is no longer prepared to change anything to do with the super city. 

“Rather, despite all the bravado, Labour is now standing completely aside when it comes to Auckland. The most Labour is now promising is to encourage the council to hold some kind of public inquiry into how Auckland should be governed in the future. No promises of greater powers for local boards, scrapping the IMSB, or repealing super city legislation this election.

“It’s embarrassing for Mr Cunliffe that all his tough talk on local government amalgamations nationwide completely excludes anything changing in the super city – a model that Labour still claims to despise,” says Cameron Brewer

Brewer provides the two policies to compare:

The Labour Party’s 2014 Auckland local government policy: “Restore the power to Auckland Council to decide on its own structures for the delivery of transport and roading services, on which CCOs it retains, affirmation of the roles of Pacific, Ethnic and others, and on land use and housing planning and provision.  We will encourage Auckland Council to hold a full public inquiry into how best Auckland should be governed in the future.”

The Labour Party’s 2011 manifesto: “Labour will fix the super city’s democracy: enshrine powers of local boards, transition from the appointed Maori Statutory board to elected Maori seats, repeal the law that imposes a corporatised transport agency, and review the governance and democracy laws and structures after two years. Labour will set up a Common Accountability Platform for Auckland – Ministers, officials, and representatives of central government will agree common priorities with Auckland Mayor and Council, and ensure better, fairer better alignment between Aucklanders’ voices and needs, council capabilities, national policy and budget commitments.”

So their policy now is to basically ask the Council to have a public inquiry!

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$18 billion and rising

August 12th, 2014 at 4:00 pm by David Farrar

Steven Joyce points out:

Updated figures today show that Labour’s election-year spending spree is now up to almost $17.9 billion over four years – and counting, Associate Finance Minister Steven Joyce says.

“Labour’s own numbers show spending promises to date of $16.4 billion over four years,” Mr Joyce says.

“However, they have woefully underestimated the costs of introducing compulsory KiwiSaver, dismantling the electricity sector and paying a 12.5 per cent R&D tax credit.

“For example, Labour claims to be bringing 500,000 extra people into KiwiSaver from 1 October 2015, and would be paying them a tax credit that averages around $370 a year plus a $200 a year kick-start for the first five years. A simple calculation shows that the cost of this must be approaching $250 million in the first year, rather than $141 million as Labour is claiming.

“It’s interesting that Labour’s costing of exactly the same policy in 2011 was more than two-and-a-half times higher than it is now in 2014, so it  looks like they’ve cut a few corners this time around.”

Mr Joyce says when you put more realistic costs on these policies it takes Labour’s numbers to $17.9 billion over four years.

“More will be added to this bill as Labour makes more desperate promises – and that’s not counting the big spending of their prospective coalition partners the Greens,” Mr Joyce says.

Bye bye surplus, hello deficit it will be. Which means that Labour will have to keep increasing taxes.

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A sensible oldie

August 12th, 2014 at 10:00 am by David Farrar

The Herald reports:

There were tough questions, soft questions, and sometimes no questions at all as Labour leader David Cunliffe took to the Auckland suburbs of Glen Innes, Onehunga and Tamaki yesterday to sell the party’s policies.

Fresh off his announcement that all over-65s, pregnant women and children under 13 would get free GP visits and prescriptions, Mr Cunliffe visited Onehunga Mall.

But it was a shaky start, as a gentleman threw up his hands in a flutter in an attempt to avoid shaking Mr Cunliffe’s hand.

And Colleen Whitehouse, 77, said she didn’t want Labour’s healthcare policy. “I think it would cost the country too much money.”

It wold, and far more than they say. Labour constantly make the mistake of never allowing for the fact that if you don’t charge for something, then far more people will use it.  Student associations used to give away free “hardship” money and every year they would report how surprised they were that more and more students would turn up wanting free money.

hardshipbyage

This graph is from the Dim Post, where Danyl points out:

Labour’s policy is a generous subsidy to the least needy group in the country. It’s also a very large group of people with high health-care needs and giving them ‘free’ access to healthcare is going to cause a huge increase in demand for primary health services.

Labour is promoting higher taxes on families and businesses of up to $5 billion a year, so they can increase subsidies to the “least needy”. Our aging population already poses massive fiscal challenges to us in terms of affordable healthcare and superannuation. Labour’s policy will make future healthcare even more unaffordable.

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Which Labour MP was a Soviet informant?

August 12th, 2014 at 5:18 am by David Farrar

Phil Kitchin at Stuff reports:

KGB files smuggled out of Russia reveal a former Labour MP was an informant for the feared Soviet spy agency and was given the codename “Gerd”.

The files say the MP was in contact with Yuri Drozhzhin, the KGB agent who handled former top government official Bill Sutch for several years. …

The Mitrokhin files say an unnamed Labour MP, born in England in 1926, was in contact with Drozhzhin during the KGB agent’s Wellington posting.

He was given the codename “Gerd”, and information passed to the KGB said he was also a member of Labour’s executive committee.

There can’t be that many former Labour MPs born in 1926 in England. A chocolate fish to anyone who can name one or more.

The Dom Post editorial also looks at whether the evidence stacks up to conclude Sutch was a spy. They note:

What are we to make of this? Like all historical documents, this one must be interpreted carefully. The reports of spies to their superiors are like all other bureaucratic reports: they aim partly to impress the boss, to put the best spin on things, to prove the efficiency and value of the underling’s work.

Helen Sutch, the economist’s daughter, dismisses the KGB file for this reason. It was “well-known that KGB agents in general were desperate to talk up any contacts they had because they were under pressure from their superiors”.

Certainly this kind of thing could have happened. Do we know that it happened with Sutch? It needs to be said that the Mitrokhin Files, which are the source of the Sutch entry, have proved reliable in many other cases.

When these reports were written, the authors never imagined the mighty USSR would fall, and these reports would become public one day.

And then there is the circumstantial evidence that brought suspicion on Sutch’s head. His stated reason for meeting a Russian agent on a dark and rainy night in a Wellington suburb was farcical. He wanted to discuss Zionism, he said.

Put all of this together – the entry in the Russian archive, the general reliability of the Mitrokhin material, and Sutch’s extremely dodgy dealings with a KGB agent – and the conclusion seems reasonably clear. Sutch was indeed a Russian spy.

I think that is the most reasonable conclusion.

Some have pointed out the files do not include details of any actual spying activity, which is true. The argument is that he supported the Soviet Union (which is a horrific lapse of judgment in its own right) but never gave them actual classified material that was detrimental to NZ security. It’s unlikely we’ll ever know for sure what sort of information he did give them, but regardless my view is that passing any information at all to what was then a totalitarian oppressive state showed he was a man whose ideology got ahead of everything else.

UPDATE: A reader suggests to me that the codename “Gerd” gives a clue to the former Labour MP, even though the exact details of DOB and place of birth do not fit.

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Labour Party candidate calls John Key “Shylock”

August 11th, 2014 at 1:24 pm by David Farrar

shylock

 

Steve Gibson is Labour’s candidate for Rangitata.

He is entitled to call John Key a “nasty little creep, “with a nasty evil vindictive sneer” even though this doesn’t quite fit Labour’s Vote Positive campaign.

But he is not entitled to call John Key “Shylock”. That is racist and anti-Semitic.

I expect Labour will deselect Steve Gibson rather than have a racist candidate. Well I hope they do.

Hat Tip: Whale Oil

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Garner on Xenophobia

August 11th, 2014 at 11:00 am by David Farrar

Duncan Garner writes at the Dom Post:

So suddenly we’re all against selling off farms to foreigners. Well, it’s not really just foreigners, is it. Let’s be honest – we’re worried about the Chinese buying our farms. They’re not like us. There you go, I said it. Clearly many are thinking it. Cue Opposition politicians lining up to scratch our collective itch. Nationalism? Racism? Xenophobia? All of the above? The reality is we’ve been hocking off our farms to overseas buyers for years and no-one seemed too fussed. Australians, Germans, Russians, the Swiss and the Americans – no worries.

You expect it from NZ First, but not from Labour.

The debate has flared up over Lochinver Station, near Taupo. A reputable Chinese company wants to buy it for $70 million. They bought Crafar Farms and, from all reports, have improved it. They promise to upgrade Lochinver and keep the 20 Kiwi staff on. The sellers, the Stevenson family, want to take the money and reinvest it in their other business interests, such as quarries, and create about 8000 jobs over time. Surely we support that – don’t we? Labour has effectively pledged to stop the sale if it gets into government. Let’s pause and consider the hypocrisy: Labour’s position is a massive change of heart.  And Winston Peters, who was in government too from 2005-2008  must have been asleep at the wheel. Labour allowed Poronui Station to be sold in 2007 – that’s the farm next door to Lochinver Station. Labour Cabinet minister David Parker even asked a question of himself in Parliament about that sale – trumpeting the benefits of foreign investment.

They are such hypocrites.

In the last term of the Labour-NZ First government, an average of 762 square kilometres of land was sold every year. The amount sold in the past five years under National has been about 390sq km a year. The Campaign Against Foreign Control of Aotearoa estimates about 8 per cent of our best farmland is in foreign hands. Should we have banned film director James Cameron from buying his farms in the Wairarapa? He’s about to make Avatar 2, 3 and 4 in New Zealand and that will create hundreds, if not thousands, of jobs. Should he have been told to bugger off? Labour leader David Cunliffe is even suggesting that Australians be banned from owning big farms here too. He’s taking ‘‘advice’’ over it – which is code for he’s making up policy on the hoof.

What’s new. And for outright racism, here’s Winston:

“As they say in Beijing, two Wongs don’t make a right.”

Winston defends the joke on the basis he heard it Beijing. But jokes are all about context. When you make the joke in the context of spreading fear and phobia about Chinese, then it is not funny, but nasty.

Jamie Whyte points out:

David Cunliffe’s suggestion that Australians be banned from owning big farms invites retaliation from Australia. 500,000 Kiwis currently live in Australia and many own land there or would like to.

Last year, Cunliffe told Australian government ministers and business leaders to give Kiwis “a fair go.”

Cunliffe said it is unfair that New Zealanders in Australia are treated differently from Australians in Australia. Yet he seeks to be Prime Minister on a promise to treat Australians differently from New Zealanders.

The inevitable retaliation would have a delicious irony, with Russell Norman’s support for the policy losing him his right to buy land in his home country. But that joy will be far outweighed by the terrible losses to New Zealanders.

The freedom to move back and forth across the Tasman, and to buy and sell property in both countries, is a great advantage to New Zealanders. The government should guard it jealousy. It should not be put at risk for the cheap political purposes of a desperate politician.

Land sales are regulated. Anything over a certain size must meet a national interest test. You can debate whether the test should be altered, but those parties advocating an outright ban are trying to reintroduce Fortress New Zealand from the 1970s.

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Labour’s health promises not well targeted

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

Stuff reports:

Labour is promising 1.7 million people – 40 per cent of the population – will be eligible for free doctors visits and prescriptions under a Labour-led government.

Leader David Cunlifffe announced the plan today at his campaign launch in Auckland saying the September 20 election was about a choice between prosperity for all or only for a few.

“After another three years heading in the direction we’re heading we just won’t know this country. Our rivers will be dirty. What’s left of our assets will be sold, and so will vast tracts of our land. We will be tenants in our own country,” Cunliffe told the 800 strong audience, in a reference to the recent controversy over farm sales to foreigners.

The major health package includes free doctors visits and prescriptions for almost 700,000 people aged over 65 at a cost of $120m.

This is a massively mis-targeted policy which is entirely about votes, not health.

The Ministry of Health done an annual health survey. One of their questions is whether someone has not gone to see a GP in the last year due to the cost. Here is the breakdown, in order, by age:

  • 25 – 34: 22.3%
  • 35 – 44: 17.8%
  • 15 – 24: 15.8%
  • 45 – 54: 13.9%
  • 55 – 64: 12.1%
  • 65 – 74: 6.3%
  • 75+: 4.7%

So Labour’s policy is not just slightly badly targeted – it is as far away from the area of most need as possible. They are saying we must provide free GP visits to the age group that has the least problem paying. It’s is purely about middle class welfare votes, not about health.

What about free presciptions? Here’s the breakdown by age again of those who did not get a prescription filled because of cost:

  • 25 – 34: 7.6%
  • 45 – 54: 7.5%
  • 35 – 44: 7.2%
  • 15 – 24: 6.1%
  • 55 – 64: 5.6%
  • 65 – 74: 3.2%
  • 75+: 1.9%

Also the Health Survey shows a positive trend for prescriptions, not a worsening one. The proportion of elderly not being able to afford to get their prescriptions filled dropped by a quarter to a third in the last year.

So again Labour policy is aimed at those with the least problem paying. It is a very cynical costly bribe.

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Labour’s campaign launch

August 9th, 2014 at 12:00 pm by David Farrar

An unidentified columnist at Stuff writes:

Has Labour miscalculated?

Its campaign launch tomorrow will have all the glamour of any event held at Auckland’s waterfront on the viaduct. That decision was no doubt deliberate.

If ever there was an occasion when Labour needed to put on its game face it’s the campaign launch, when it needs to convince the punters it is still in the game.

A party atmosphere can hardly hurt.

But National has stolen a march on Labour by launching its own campaign in two weeks from Manukau in the heart of South Auckland, traditional Labour territory.

Given that this is where Labour has placed much of its focus on turning out several hundred thousand voters who went awol in 2011, the challenge thrown down by National is clear.

Don’t just assume those voters will all go your way, is the inference that can be drawn from National’s deliberate march into Labour’s heartland.

It is a very ballsy move by National.

Since his earliest days as prime minister, Key has harboured a dream of extending National’s support into heartland Labour areas like South Auckland, particularly among the more conservative Pacific Island communities turned off Helen Clark’s government by its anti-smacking stance.

That is part of National’s wider strategy of being a party with appeal to a broad spectrum of voters by reaching out to non-traditional constituencies.

The May budget, with its extension to paid parental leave and free doctors’ visits showed National is not squeamish about cribbing policy from opponents to further this goal.

Labour has been slow to wake up to National’s game plan.

Even Key’s comments about targeting future tax cuts at low to middle income earners show the extent to which National remains focused on the strategy.

I want tax cuts, and I am very happy if they are targeted at low to middle income earners. a reduction in the bottom tax rate means all taxpayers get a tax cut.

For years, Labour successfully papered over the divisions between its left and right factions, thanks largely to the iron-clad control of Helen Clark.

But the last few years have seen it re-erupt to the extent that both sides seem hell-bent on giving the impression they might even relish the prospect of a loss on September 20 so they can blame the other for engineering it.

The party’s left faction are already talking up a caucus purge and de-selection after the election.

Excellent. Purges are always a great idea.

This is also a fight over whether David Cunliffe should stay on and lead the party in the event of defeat.

Those who believe he must stay are ranged against those in the caucus who they see as wanting to use defeat as an opportunity to roll Cunliffe.

Cunliffe’s office doesn’t even bother to hide the divisions between the caucus and the wider grassroots. One senior adviser called recently to take issue with a statement that the grassroots had grown increasingly distant from the party. Their complaint was not that it was untrue, but that it was the other way round – the caucus had grown distant from the grassroots.

Think about that statement. A senior staff member in the Labour Leader’s office called a journalist, to slag off the caucus. And if they win, these guys will be running the country.

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