Smellie on TPP

February 16th, 2014 at 7:00 am by David Farrar

Patrick Smellie writes 10 things he says TPP opponents don’t want you to grasp:

  1. The secrecy surrounding TPP negotiations is typical of any such exercise.
  2. The bogey of corporations being able to sue governments is not only overblown, but corporations can do that now, without a TPP.
  3. Corporations might try to sue but they’ll be whistling if the government is acting in the public interest.
  4. United States corporate interests are obviously among those seeking influence on the TPP agenda, but that doesn’t mean the US Senate and Congress are on board.
  5. US politicians know less about what’s in the TPP negotiating documents than US corporate lobbies.
  6. No-one knows what the TPP could be worth to the New Zealand economy
  7. The US on the backfoot on many of the most contentious issues
  8. This is the end of Pharmac. Balderdash.
  9. The deal will be done behind closed doors. It can’t be. Every Parliament of every country involved will have to ratify any deal signed by leaders.
  10. There’s no guarantee TPP will come in to land.

It is quite legitimate to oppose some of the things that the US (especially) is asking for in the TPP, I am strongly opposed to many of their proposals for the intellectual property chapter. But there is a difference between opposing some of what the US is asking for, and demonising the TPP negotiations as a whole.

Matthew Hooton makes a similiar point in his Cunliffe’s Four Fails:

Mr Cunliffe’s fourth fail was over the Trans-Pacific Partnership (TPP) about which Labour has been fully briefed by the government, through Mr Goff.

Pandering to the Greens, Labour’s radicalised membership and Auckland anti-globalisation activist Jane Kelsey, Mr Cunliffe called for the TPP negotiating text to be released.

The good news is that Mr Cunliffe accepts this can’t happen while negotiations are under way and that the text should remain secret until it is finalised.

He says, however, it should be released two weeks before it is “signed.”

It is difficult to know what Mr Cunliffe – who claims, implausibly, to be “a former New Zealand trade negotiator who worked on the GATT negotiations and bilateral trade agreements” and to have “represented the New Zealand dairy industry overseas in many markets and on many occasions” – even means.

He cannot seriously be proposing that New Zealand unilaterally release the text without the agreement of the other parties.  That would see New Zealand excluded from all further international negotiations on any topic.

He must also know there is no two-week gap between a treaty being “finalised” and it being “signed.”  At trade minister level, they are the same thing.

Trade agreements are negotiated under the principle that nothing is agreed until everything is agreed.  When trade ministers do reach agreement, there is seldom even a formal signing ceremony.  Instead, the agreed text is released as part of a communiqué and each country then decides if and when it will ratify it.

For the TPP, the US Congress has not granted President Obama fast-track negotiating authority, reserving the right to re-litigate each clause.  The text will be debated in detail in our parliament and media.  While the cabinet holds the formal ratification power, Parliament retains the right to legislate over the top of it.

 It could be a long time – even years, if other TPP countries have difficulty ratifying the deal – between a final TPP text being publicly released by trade ministers and it ever being finalised and ratified to come into force.

If he really ever were a trade negotiator, Mr Cunliffe would surely know this.

Matthew is a former press secretary to a Minister of Trade Negotiations.

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Baby bribe details not made clear

January 29th, 2014 at 1:00 pm by David Farrar

3 News reports:

Labour sold the baby bonus as $60 per week “for a baby’s first year”. But the truth was buried in the fine print. For most parents it only starts after an expanded 26 weeks of paid parental leave.

Labour’s own publicity showed the $60 payment applying from birth to age one. It actually starts after six months.

“If the parents are getting paid parental leave, they don’t get this concurrently,” says Mr Cunliffe.

“When I read the speech and looked at it, I thought absolutely you got it for the entire year your child was under one year of age,” says Prime Minister John Key. “I think David Cunliffe is being very tricky. I think he’s actually trying to mislead the New Zealand public.”

And further it seems you may be earning hundreds of thousands you until having the baby, and still get the baby bribe:

If Labour wins power, all families who earn less than $150,000 will get the bonus. Mr Cunliffe says that limit would be judged when they had the baby and were down to one income.

“It applies to income at the time they are applying for the $60-a-week benefit,” says Mr Cunliffe.

That means a couple earning a total of up to $300,000 would get the bonus if one took leave to be with the baby and they fall under the $150,000 mark. But before this could be properly clarified, Mr Cunliffe walked off.

It’s even worse than that. If Theresa Gattung was still CEO of Telecom and took a year off from being CEO to have a baby, then she’d get the baby bonus (if her partner earns less than $150,000) even though she was returning to a job that paid over a million dollars a year.

Matthew Hooton also looks at the policy. He notes:

  • A family on $49,000 with a three year old will be taxed to pay an upper-middle-class welfare to families on $149,000 with a three month old.
  • As a parent he knows the first year of a baby’s life is the cheapest as they eat so little. Costs rise as they get older.
  • Will increase child poverty as the experience in Australia is that a baby bribe bonus increases the birth rate, leading to larger families in communities that can least afford it

Matthew also picks up on the point I highlighted a few days ago. David Cunliffe claimed that one in five Kiwi kids can’t afford a second pair of shoes, when in fact the real number is one in 20. He generously suggests Labour mixed up 20% and one in twenty!

UPDATE: Patrick Gower blogs on Labour’s misleading policy:

The Labour Party has been putting voters wrong about its baby bonus.

Labour has been deliberately misleading, and in my view dishonest by omission.

On Monday night I told 3 News viewers that under Labour’s $60 a week baby bonus policy, families would get $3120 a year for their baby’s first year.

A simple calculation you might think, of $60 mutiplied by 52 weeks, given David Cunliffe announced in his State of the Nation speech: “That’s why today, I am announcing that for 59,000 families with new-born babies, they will all receive a Best Start payment of $60 per week, for the first year of their child’s life.”

Now most normal people would think that means “all” those parents will get the payment “for the first year of their child’s life”.

But it wasn’t true – not that you would know that from Cunliffe’s speech, media stand-up, the MPs who were there to “help” and all the glossy material handed out to us.

Because buried in the material was a website link that takes you to a more detailed explanation policy.

And on page six of that policy document, in paragraph 3, it revealed the payment would commence at the “end of the household’s time of using Paid Parental Leave, ie. after 26 weeks in most cases.”

So translated, in most cases, the $60 a week payment is not for the first year, but for the second six months.

Most journalists, like our office, only had time to find this overnight on Monday.

Here’s a question. When all the media reported the policy as applying for a full year, instead of six months, did anyone in Labour contact them and tell them they were wrong? Or were they happy for the media (like everyone else) to report it the way they did, and hoped they wouldn’t notice the fine print?

Now Cunliffe and Labour knew this $3120 for one year figure was wrong, but nobody rang to correct it.

Usually political parties and the taxpayer-funded spin doctors are screaming down the phone if there is an error (and rightfully so, I might add), but in this case Labour was dead quiet.

Question answered.

And I believe that’s because Labour wanted the punters to think it was $60 for a year.

They were desperate to get cut-through and were happy to omit key information and let the wrong message get out there.

And I think that is deliberately misleading and dishonest from Labour.

At some point, I’m sure senior Labour people made a decision to omit key details on the day to maximise publicity – it was no mistake.

But not the way to win friends and influence people.

And it goes on: Labour’s Sue Moroney has just explained to me that there are 60,000 births in New Zealand each year, 59,000 of those families earn under $150,000, 26,000 are eligible for paid parental leave, meaning 23,000 will get the $60 for the full twelve months.

That means Cunliffe should have said 23,000 people will get the baby bonus for a year, which is not “most” of the 60,000 familes that have babies each year – it’s actually under half.

Interestingly it means the baby bonus will mainly go to those who were not working when they got pregnant!

Cunliffe also struggled to explain yesterday whether families would be judged on their pre-baby double income (ie. two earners of $140,000 each, getting $280,000) or after-baby income $140,000.

This seems a pretty straightforward aspect to me, and I wonder if it was policy-on-the-hoof. He either didn’t know the policy properly or was trying to avoid showing how generous the policy is.

For the record, it’s judged on the after-baby, one income and Cunliffe says he misunderstood the questions from myself and Brent Edwards.

So as I said above, the CEO of Telecom could get the baby bonus if she takes a year off. This isn’t middle class welfare, but universal welfare – which we pay for!

The bonus kicking in after six months is nothing to be ashamed of. It is a generous policy and has set the political agenda this week.

Labour didn’t have to be dishonest – it could have just told voters the truth.

Media will be very very careful with the next announcement to ignore the speech and press release and look for the fine print.

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Hooton rules out Epsom and ACT

January 14th, 2014 at 8:08 am by David Farrar

Stuff reports:

Right-wing lobbyist Matthew Hooton has ruled himself out from contesting the ACT party leadership.

He has joined former leader Rodney Hide in removing himself from the list of potential candidates in the past week.

In a column written for the National Business Review, Hooton said he was certain he would win the electorate if he stood, but felt he was too closely aligned to the National Party.

“If ACT is to succeed in the longer run, it must strongly differentiate itself from National, especially given the interventionist tendencies of the current regime, and it must be a genuine party, without any suggestion of being a subsidiary of the bigger brand,” he said.

Hooton endorsed a split configuration of former Cambridge philosophy-lecturer-turned-management-consultant Jamie Whyte as leader of the party, and David Seymour as the candidate for Epsom.

Hooton’s column is here.

Compared to Matthew’s current earnings, being an MP isn’t a living wage :-)

 

 

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Hooton’s A to Z

December 22nd, 2013 at 9:00 am by David Farrar

From NBR:

E is for English, as in Bill, the standout star of the cabinet, who can take the credit when the economy booms next year, and whose macroeconomic stewardship deserves better support from his senior colleagues who remain preoccupied with questionable one-off deals. 

F is for Free Democrats, a great name for a new classical-liberal party, although the German version had its worst result since 1949, falling below the 5% threshold, missing out on seats in the Bundestag, and thus threatening Angela Merkel’s hold on power despite her Christian Democrats being by far the most popular party.

I’d call a new classical-liberal party “The Liberal Party”. The name should make it clear what you stand for.

G is for Graham, as in McCready, who first put Trevor Mallard in the dock and now John Banks, and maybe David Cunliffe, putting the police to shame.

He has vowed to prosecute Cunliffe for his tweet.

J is for jealous, the feeling of all of us too stupid to buy Xero back at launch (partly made up for by not being so stupid as to buy Mighty River Power or Meridian).

I’ve purchased at launch Xero, Mighty River and Meridian and believe all will be good long-term investments.

L is for Louisa, as in Wall, who joins a small elite club, including Fran Wilde, Tim Barnett and Sue Bradford in actually achieving something as a backbencher.

O is for awesome, like the All Blacks, Valerie Adams, Lydia Ko, Lorde and, sadly, Oracle Team USA.

Z is for zoo, and Auckland’s will have a new elephant, by far the most substantial ever outcome by any prime minister at a CHOGM.

That is probably correct!

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Hooton on rejuvenation

December 14th, 2013 at 3:00 pm by David Farrar

Matthew Hooton writes in NBR:

In Mr Key’s cabinet, only Mr McCully entered Parliament before the 1990s. A quarter of his cabinet – Mr Joyce, Mr Bridges, Ms Kaye, Hekia Parata and Amy Adams – is from the class of 2008. Treaty of Waitangi and international trade specialists Chris Finlayson and Tim Groser have only been around since 2005. The same is true of Welfare Minister Paula Bennett and Defence Minister Jonathan Coleman.

Of today’s cabinet, only Bill English, Tony Ryall, Nick Smith and Mr McCully were part of the National government of the 1990s and the first three only towards the end. Of them, only Mr McCully was a genuine supporter of the Bolger/Richardson regime. One of the most important factors in Mr Key’s success is that his government was genuinely new and it has kept renewing over its five years.

In contrast, two of the top performers in David Cunliffe’s opposition, Phil Goff and Annette King, were ministers in the Lange/Palmer/Moore government of the 1980s. Ruth Dyson was party president during that era, and Maryan Street in the early 1990s. Mr Cunliffe and his deputy David Parker were two of Helen Clark’s favourite ministers, while Grant Robertson and Jacinda Ardern were on her staff. Party strategist Trevor Mallard first became an MP in 1984, before even Mr McCully. The only confirmed Labour retirement for next year is its racing spokesman, Ross Robertson.

Labour is still very dominated by the past.

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Hooton on Greenpeace

November 24th, 2013 at 9:00 am by David Farrar

Matthew Hooton writes in NBR:

They were there, they said, for everyone.

This week, Greenpeace chief executive Bunny McDiarmid led a self-described flotilla to try to stop Texas-based company Anadarko from exploring for oil off the West Coast of the North Island. The effort, according to Ms McDiarmid, was “in defence of our oceans, future generations, our climate and our coastline.”

Her sidekick, former Green Party co-leader Jeanette Fitzsimons, went further, claiming to speak for all living creatures.

Both insist Anadarko is not welcome in our waters. …

In my life, I have swum in the ocean, sailed Lasers, gone snorkelling, caught the odd fish, water-skied, built sand-castles and strolled along Piha at sunset. The New Zealand coastline and ocean are as much mine as Ms McDiarmid’s. So too “the climate.” I also have just as much interest as her in “future generations.” Indeed, when I speak of these things, I do so without ambiguity or conflict.

In contrast, Ms McDiarmid speaks as a paid employee of a multinational empire with assets of $350 million and annual revenues of $435 million, of which about $110 million is paid to head office in Amsterdam.

The New Zealand franchise raises around $8.5 million a year, of which $2.5 million is spent on further fund-raising and another $2 million is paid to Amsterdam, including for the rights to use the Greenpeace brand. It is a similar setup to an oil company or fast-food chain.

Greenpeace is indeed a multinational brand.

Speaking, therefore, without the same financial interest in the matter as Ms McDiarmid, I say Anardako is welcome in my country, including along my coastline and out in my oceans. I hope they find oil, and lots of it, and I hope others do too.

Speaking on behalf of future generations, I then hope Energy Minister Simon Bridges gets on a plane to Norway before too long and learns what a successful oil industry and associated investment fund can do to transform the living standards of a small country, while not compromising its tourism industry or natural beauty. I hope that Mr Bridges and his superiors understand that if New Zealand does not drill our oil and sell it to transform our living standards, then – as global supplies eventually become scarcer over the next century – someone will one day come and take it. It’s always better to sell something than have it stolen. Mr Bridges should also increase the royalties the oil companies have to pay.

Having said all this, I also understand that there is a risk, albeit miniscule, of a serious spill. This would kill birds, seals, dolphins and whales, and swimming, snorkelling, sailing and sandcastles would be out of the question for a while. But I also know the environment would heal itself much quicker and more completely than Greenpeace will tell us, as was the case in Brittany after 1978, Prince Williams Sound after 1989, the Gulf of Mexico after 2010 and the Bay of Plenty after the Rena in 2011. It is a risk, in my view, worth taking.

Next time Ms McDiamid purports to speak for me, I would kindly ask her to also make these points. If her bosses in Amsterdam will allow it.

We’ve had drilling for decades in Taranaki. I get sick of people in Auckland and Wellington demanding that people in Taranaki and the West Coast should lose their jobs, to make them feel better.

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Hooton vs Willie and JT

November 7th, 2013 at 4:09 pm by David Farrar

Matthew Hooton lets loose to Willie and JT about their previous shows on the Roast Busters. He gets thrown out.

Well done Matthew. Making excuses for the men involved on the basis of where they live or how the girls dressed is just wrong. The girls were 13. That is the end of it.

Matthew has Facebooked:

 I don’t want to be all moralistic about this, because I have behaved terribly from time to time.

But I have two daughters, aged 6 and 8. I hope not, but I expect that if they follow the example of their parents they will behave appallingly when they are teens. I expect they will dress in ways I find reprehensible, hang out with friends I disapprove of, and might get shamefully pissed at what was meant to be a wholesome 15th birthday party.

To some extent, this will be my fault for not being as a good a parent as I should be. 

However, when my 14 year-old girls do behave badly, I expect that any 17 year-old men nearby will, at worst, ignore them or, at best, look after them and get them home safely.

My daughters are entitled to rebel and behave badly, without being raped.

That is the point.

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Espiner on charter schools

September 23rd, 2013 at 7:00 am by David Farrar

Colin Espiner writes:

I’d thought that centrally-controlled, one-size-fits-all approach to education policy had disappeared with the introduction of Tomorrow’s Schools more than 20 years ago. But I reckoned without the teacher unions.

The vitriol spouted by the Post-Primary Teachers Association (PPTA) and the Educational Institute (NZEI) at the Government’s announcement last week that it would fund five privately-run Partnership Schools took me back in a flash to my early days as a reporter covering teacher union rallies and marches.

Back then, it was bulk funding and the devolution of central control to community boards of trustees the teacher unions didn’t like. Oh, and Lockwood Smith.

They went on to oppose NCEA, National Testing, religious schools integration, private school funding . . . in fact pretty much anything that threatened the status quo and the teacher unions’ privileged position within it.

NZEI specially seem incredibly reactionary. They have fought a four year campaign against simply having an extra page in a kid’s report cards that states where they are at compared to a national standard for their age in literacy and numeracy. Incredible.

What’s so wrong with trying something a little different? With offering students failing in the mainstream education system an alternative? A little military training wouldn’t go amiss with some of them. And is a spot of faith-based teaching and some Maori immersion learning really going to do any great harm?

Apparently. According to the PPTA, these schools are so evil the union is considering asking its members to boycott all cultural, sporting, and professional events involving Partnership Schools. Marvellous – that’ll help those kids already alienated from the mainstream feel like they’re wanted.

Matthew Hooton describes how the planned boycotts will work:

In practice, it means that if students from one of the five schools enter a netball team in their local competition, the PPTA will order its members to stop their students from playing against them.

If partnership-school students qualify for the regional swimming sports, the PPTA will prevent other students from entering the pool for fear of political pollution.

The same goes for the local debating, kapa haka or Mathex competition.

Who would have thought that unions would be pushing for effective segregation of students, like the US had in the 1960s.

Espiner concludes:

No one is suggesting the state education system should be dismantled. It provides a mostly adequate, sometimes excellent, service. But even the bureaucrats in Wellington admit they don’t have a monopoly on good ideas. So what are the unions so afraid of?

Possibly more flexible working hours, fewer holidays, a greater range of pay rates, and non-unionised workers. A system outside state control, where commercial success is actually encouraged. A bit like the world the rest of us live in.

At worst, these schools will not live up to their potential and will be shut down, probably by Labour. But what if they succeed? It won’t just be the students who stand to benefit. It’ll be all of us.

And unlike state schools, not one student or parent will be forced to attend a charter school. There are no zones for charter schools. Every pupil who attends will be there because they and/or their parents have decided they think they will do better at that school. That choice, is what the unions are trying to prevent.

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Hooton on 100% pure

August 17th, 2013 at 8:54 am by David Farrar

Matthew Hooton writes in NBR:

The usual suspects are at it again.

After the Fonterra fiasco, the likes of the Daily Mail, Rod Oram, the Chinese Communist Party and the Green Party are again targeting Tourism New Zealand’s 100% Pure campaign.

I wonder if other countries put up with this nonsense? Many countries have marketing slogans that are of course not literal statements of fact.

In fact, the 100% Pure campaign was never exclusively or even primarily about the environment.

Launched in 1999 by the Shipley government, and maintained throughout Helen Clark and Mr Key’s prime ministerships, 100% Pure was always about the quality of the visitor experience.

Jumping off a bridge tied by the feet to an elastic band is 100% Pure adrenalin, dining on fresh crayfish and Cloudy Bay is 100% Pure indulgence, and so forth.

Tourism New Zealand’s market research always showed that tourists and potential tourists understood the campaign’s messages far better than those who, for domestic political reasons, have co-opted 100% Pure and subverted it to be solely about the natural environment.

Matthew is absolutely right. They are trying to hijack what the slogan is about.

Indeed, early market research suggested that the initial 100% Pure imagery was too focussed on the natural environment and neglected people and activities. Potential tourists wondered if there was anything to actually do in New Zealand except stare at a lake.

As a result, through most of its history, 100% Pure’s imagery has been designed to tell a story of how landscapes, people and activities combine to produce a uniquely, 100% New Zealand experience.

Environmental lunatics like Dr Ehrlich may define a world as 100% Pure only if there are no people in it but most human beings understand they have just as much right to be part of the environment as the Eritrean gannet.

Indeed, a country with no humans is the only way you can be 100% environmentally pure.

Those who doubt how our environment stacks up are clearly ignorant of the rest of the world but those who visit here are not. In Tourism New Zealand’s 2012 Visitor Experience Monitor, satisfaction with our landscapes and natural scenery received an overall rating of 9.5 out of 10, the highest rating in the survey and ahead of food, beverages and shopping.

Only 9.5/10. What a disgrace.

The commercial danger is that the green movement’s misrepresentation of 100% Pure will create pressure for it to be dropped.

100% Pure is the most successful tourism marketing campaign in history, winning dozens of international awards including best destination marketing campaign at the 2012 World Travel Awards for its latest 100% Middle Earth iteration.

Part of its secret is its longevity. While other countries change their tourism campaigns regularly, 100% Pure has survived 13 years. Its core message has been repeated for so long that it has become well enough known to be worth theDaily Mail criticising it.

The data speaks for itself. Since it was launched, holiday arrivals have increased by 56%, from 785,000 in 1998/9 to 1,224,000 in 2012/3. Total revenue is up 53% to $5.5 billion. 

Yet a few dedicated people want us to drop it.

New Zealand is a clean and green country, with a beautiful natural environment, and offers a wide range of 100% Pure holiday experiences. We should be proud of it. And the green movement and their foreign backers should stop running it down.

Hear hear.

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Hooton on poverty and income inequality

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

Matthew Hooton writes in NBR:

Since then, activists and academics have emphasised inequality. 

In New Zealand, the Child Poverty Action Group says 270,000 children – half of them Maori or Pasifika – live in poverty, around a quarter of the total.

Otago University says 400,000 New Zealanders suffer fuel poverty.

Depending on the measure, the welfare industry tells us that around 760,000 New Zealanders live in poverty.  Our income inequality is said to be a bit better than the hellhole of Canada but a bit worse than the paradise of Greece.

So the aim of the left is to have us more like Greece, and less like Canada!

In reality, all these measures are mere statistical constructs.

If every New Zealander’s income immediately doubled (ignore for the sake of argument any inflation effect) so-called poverty in New Zealand would remain unchanged.

If dairy farmers and tourism operators have a good year, more children would be said to live in poverty because the median income would rise.

Similarly, cut middle-class salaries, or slash the value of the Rich List’s portfolios, and child poverty apparently falls.

This is very true, and those numbers quoted are near meaningless. The far better measure of hardship is the survey done by eithers Stats and/or MSD every few years asking a representative set of households what items or services they do not have, that they wish to have.

This is nonsense and confirms Margaret Thatcher’s famous assertion that the left would rather have the poor poorer provided the rich were less rich.

That case was made just last week by Dr Geoff Bertram – the architect of the Labour/Green electricity nationalisation to combat “fuel poverty” – when he proposed chief executive salaries should be no more than three times that of a company’s lowest-paid worker.

If Fonterra employed even one factory hand on, say, $20/hour, its chief executive would be limited to a salary of about $125,000 a year.  It is impossible to see how that would help even one of the 760,000 New Zealanders apparently living in poverty.  It is a proposal solely motivated by the politics of hate.

Dr Bertram is the architect of Labour’s and Green’s power policy.

Could you imagine Fonterra being unable to pay any staff member over $125,000 a year?

There is an argument that, at a certain point, inequality can become harmful because it can become a barrier to economic growth.

In a system of pure feudalism, where all new wealth that is created is confiscated by the rich, or a system of pure communism where all wealth is redistributed, no one would have an incentive to do anything, with economic collapse following.

The question, though, is whether there is the slightest evidence that New Zealand is remotely approaching either extreme.  If there is, it would surely be towards the latter.

Under the current tax system, including Working for Families which John Key rightly described as “communism by stealth” but has kept in place, the top 3% of New Zealand households pay a third of all net income tax.

The top 5% of households pay half and the top 12% pay three-quarters.

In net terms, the 44% of households earning under $50,000 pay no income tax at all.  Their true net tax rates are below zero.

Even when taking into account GST, fuel taxes and tobacco and alcohol excise, the redistributive effects of the current system are overwhelming.  Just 12% of indirect taxes are paid by the poorest 20% of households and a third by the wealthiest 20% of households.

The current economy is one that is growing, where unemployment is falling, wages are rising, inflation is below 1% and even the constructed measure of inequality is marginally narrowing.

It is also a country where someone like Rod Drury can turn an idea into a $2 billion company, including quite a few hundred million for himself.

We should return to the values of the 1980s and celebrate him and all those who have made it honestly onto this year’s list.

They create wealth and opportunities for New Zealanders.  It is a lie to say they make children poor.

A great column.

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Hooton on the Norway model

June 24th, 2013 at 10:00 am by David Farrar

Matthew Hooton writes at NBR:

In the 1960s and ’70s, Norway’s mainly left-wing governments decided to make their country of four million rich.  In 1963, they asserted sovereign rights to North Sea natural resources; exploration began in the mid-’60s; a state-owned petroleum company, Statoil, was launched in 1972; and the profits, taxes and royalties later put into the government’s petroleum fund, set up in 1990.

The fund is now worth approximately NZ$860 billion, or around $172,000 per Norwegian.  By 2030, it is forecast to be worth as much as NZ$4 trillion, or around $800,000 per Norwegian, and exists primarily to pay generous superannuation.

Meanwhile, Statoil has evolved into a classic mixed-ownership model company, with the government owning two thirds and the remainder trading on the Oslo and New York stock exchanges.  It is now the world’s 38th largest public company with a market value of NZ$98 billion and profits of $15.6 billion.  This is more than the entire NZX.

The thinking behind Norway’s approach is that a country’s natural reserves are intergenerational property, they are worth nothing under the ground, and the industries are inherently unsustainable: eventually, even if far in the future, the field will run dry.

The best strategy, therefore, is to get it out of the ground as soon as possible, monetise it, but avoid an economic sugar rush by investing the money for future generations.

As opposed to the competing strategy of never ever dig anything up or drill for anything.

Oil is already New Zealand’s fourth largest export earner, after dairy, meat and wood. The government collects around $400 million in royalties each year, plus another $300 million in company tax.  The present value of future royalty income alone, just from known reserves, is an estimated $3.2 billion.

Relatively conservative MBIE studies suggest that, if exploration continues to grow at current rates, royalties could yield another $5.3 billion in present value terms.  If there is faster growth in exploration, the estimate is $9.5 billion.

Even that may be conservative.  It has been suggested the value of our offshore oil reserves could be in the trillions.  Solid Energy isn’t a very good precedent right now, but New Zealand could choose the Norwegian Statoil model to secure that wealth.

Currently, oil royalties just go into the consolidated fund, to pay for everything from welfare payments to Wellington arts festivals.

The risk Mr Weake identifies is that, if large oil deposits were found, the temptation for a government would be to put the money into something to help it through the next election.  He argues we should establish cross-party agreement now on what we would do with that wealth.

He is surely right.  God knows what decisions a desperate John Key and Bill English would make – let alone a desperate David Shearer and Russel Norman – if we struck oil in the lead up to a close 2017 re-election campaign.

I am sure Russel Norman would refuse to spend any money earnt from dirty oil!

So here’s some friendly advice to the minister: have a chat with Mr Weake and his industry colleagues, take a trip to Oslo and the North Sea, face down the crypto-anarcho-neosyndicalist Greens, achieve consensus with Labour, and get New Zealand’s equivalent of Norway’s oil fund and even Statoil up and running before the election.

One could call it Kiwioil!

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The strengthening economy

June 10th, 2013 at 7:00 am by David Farrar

Matthew Hooton writes in the NBR on why John Key should call a snap election. Despite my commercial self-interest in having elections occur as frequently as possible, I don’t think there is any  probability or reason for an early election. The Government needs 61 votes to govern and has 64.

I don’t believe PMs should do what Helen Clark did and call an early election of a flimsy premise.

What I wanted to focus on though was the reasons Matthew gave for going early, in terms of the economy:

National’s budget was overwhelmingly successful and it now luxuriates in superb economic data.  Just this week, there have been announcements of thelargest increase in residential building activity in 10 years and that wholesale trade continues to grow.

These follow other official Statistics New Zealand announcements in recent weeks of improving trade data, the best ever April visitor numbers, building consents hitting a five-year high and of course the big fall in both unemployment and youth unemployment.

For its part, the Treasury reported on Tuesday that the tax take continued to track above forecast in April, with gross company tax revenue up over 40% ahead of forecast.

After the extraordinarily strong GDP growth in the December quarter – the fourth highest in the world among OECD-monitored countries, behind only China, Russia and Luxembourg – all the recent data suggests the government can expect highly positive news when March quarter GDP data is released on June 20.

There’s still a long way to go, but the indicators are generally looking to be improving.

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Norman v Muldoon

June 9th, 2013 at 10:00 am by David Farrar

Rodney Hide writes in the HoS:

Norman was safe and secure in launching a personal attack on Key. It is Key’s style and strategy not to fire back. But Muldoon would not have sat quietly by. Muldoon would have eaten him up and spat him out.

Muldoon also would never have shared his leadership as Norman does. He wasn’t a touchy-feely, let’s-sit-around-the-table-holding-hands sort of guy. He was leader and that was that. Muldoon would never have tolerated a co-leader.

And then there was Norman crying, “Give me back my flag. Give me back my flag.” That was when he was attempting to stick the Tibetan flag in the face of Chinese Vice-President Xi Jinping. Muldoon would never have done that. He was polite and respectful to our guests, whatever he thought of their domestic politics.

And if Muldoon did get into a scuffle, he would not have come out second. Once a rowdy group of young protesters shouting “Heil Hitler” attacked Muldoon as he was leaving a meeting. They hit him in the face, kicked his leg and shoved him against his car.

The then Leader of the Opposition decked one and chased the others down the street shouting, “One at a time and you’re welcome”.

Heh. An iconic moment.

Norman is Australian. Muldoon was a New Zealander through and through. In comparing Key to Muldoon, Norman gave us a very sharp reminder that he’s a very recent arrival. No one who lived in New Zealand would ever think Key was in any way a Muldoon. The comparison is bizarre.

Russel has been whining that it is wrong to say he can’t write about Muldoon as he wasn’t in NZ then, saying that means no one could write about Peter Fraser who wasn’t alive in the 1940s.

He misses the point that no one who actually lived in NZ when Muldoon was PM, would compare him to John Key without bursting into a fit of laughter at the ridiculousness of the comparison.

Norman has a PhD in political science. For Muldoon there were two types of doctors: the ones who made you well, and the ones who made you sick. He would have had a very clear view of what sort of doctor Norman was.

Muldoon fought fascism and totalitarianism in World War II. Norman was for several years active in the Marxist-Leninist Democratic Socialist Party.

They are two very different men. Muldoon was popular. His majority in his electorate was unassailable. The best Norman has done is come third.

They are men of different eras. Muldoon was minister of finance the year Norman was born.

But in other ways they aren’t so different.

Muldoon’s policies were to control the economy, fix prices, set the exchange rate, invest in hare-brained schemes, and print money to pay for it all.

He all but bankrupted the country.

In this regard, Muldoon and Norman are peas in a pod.

Matthew Hooton goes down this road also in the NBR:

Sir Robert left office in 1984, roughly when Dr Norman left high school.  At that time, he tells us, he was busy opposing Australia’s “new right” Hawke/Keating government, elected in March 1983, and “peace rallies, anti-nuclear demonstrations and animal rights activism soon became a large part of extra-curricular high school life.”

It is fantastic that the adolescent Dr Norman had time left over to follow developments across the Tasman, including Sir Robert publicly issuing enemies’ lists, banning unfriendly journalists from his press conferences, personally directing monetary policy, ramming through the Clutha Development (Clyde Dam) Empowering Act 1982, abusing young backbenchers in drunken rages, lying about the country’s fiscal position, provoking a foreign exchange crisis, refusing to follow the instructions of the incoming government and having to be bullied into doing so by his outgoing cabinet.

And on the policy front:

The irony of Dr Norman’s preposterous comparison of Mr Key to Sir Robert is that the party in today’s parliament with an economic programme most similar to Muldoon’s is the Greens.

It is the Greens who advocate greater control of the currency, extra monetary tools and more aggressive interventions by the Reserve Bank.  They are the only main party comfortable with Muldoon-style import substitution and against free trade.  How green were Muldoon’s carless days, designed to reduce reliance on oil?  How stimulatory were his deficits? 

More topically, Sir Robert exercised direct state control of the electricity sector including the state directing what new electricity generation would be built and where.  What else is Labour/Green’s NZ Power?

Instead of an across-the-board GST, Sir Robert favoured lower sales taxes on things he considered good and higher taxes on things he considered bad.

With their promised new “suite of ecological taxes,” the Greens promise the same.

This could be a good question for the Greens. How many of Sir Robert’s economic policies do they disagree with today? Any?

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Total hypocrisy

April 30th, 2013 at 12:00 pm by David Farrar

Whale Oil has a lethal blog post on the massive hypocrisy of Jeremy Elwood.

Matthew Hooton tweeted:

Go @derekfox for byelection. U wld win for @maoriparty against @nzlabour – and become leader.

Now I think Matthew’s timing was insensitive. Of course there will be talk of the political consequences of Horomia’s death, but to tweet about it two hours after teh death was poor judgement.

Comedian Jeremy Elwood tweeted:

@MatthewHootonNZ You know someone just died, right? I want to think you don’t because the level of fucktardness if you do is inexcusable.

Now Matthew deserves the raps he got from several people for his tweet, but is Jeremy the one to take the moral high ground. Whale finds this tweet from Nov 2012:

Please tell me the rumours of Margaret Thatcher dying are true? Please do not let that be a prank. I’ve been waiting too long.

And then just two weeks ago:

Ding dong the witch is dead.

I’m sorry but what a “fucktard” hypocrite. Hooton was insensitive, but not gloating. To take the moral high ground after your gloating posts over Thatcher is fucking sick.

And he is totally unrepentant:

I will never apologise for dancing on Thatchers grave. She was my personal Hitler. P.H. was just a guy.

In other words, it is fine when I do it.

Personally I find his hypocrisy and obvious hatred of right wing politicians so sickening that if I was a National MP, I’d tell him to go fuck himself if he ever invited me onto a show he is part of. Why helps a guy who hates you get ratings?

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Hooton on why Labour is veering hard left

April 29th, 2013 at 4:00 pm by David Farrar

The history of politics in not just New Zealand, but in most countries is that oppositions veer towards the centre. That is where votes are to be won.

Labour has embarked on a policy programme that can only be called radical. They are campaigning to get rid of current monetary policy and interfere in the exchange rate. They are proposing nationalisation of the energy generation sector. They are promising to pay beneficiary families the same at working families for child support (despite the extra costs of working). Their policy programme is resembling what the Greens have been pushing for the last decade, rather than what Clark and Cullen did in Government.

So why have they headed hard left? Matthew Hooton explains in NBR:

The most famous theory in political science is the median voter model.

Developed in 1929 by Stanford economics professor Harold Hotelling, it provides strategic guidance to politicians, anticipates their policy positions and predicts election results.

Broadly, it suggests that, in any two-candidate election, both are best to adopt policy to please the median, middle-of-the-road voter, and that the candidate closest to the median will win.

Indeed.

In politics, the model’s predictive power is proven not just by vast screeds of algebra by microeconomists, game theorists and political scientists, but – unlike much social-science theory – by real-world observation.

Even with apparent exceptions, like Baroness Thatcher’s three election wins, she was indeed closer to the median than failed prime minister Lord Callaghan in 1979, Soviet appeaser Michael Foot in 1983, and even Lord Kinnock in 1987.

UK Labour finally won power when they abandoned the very socialist policies that NZ Labour is now embracing.

So why the lurch to the left?

Do the maths again, but assume three major players, and you get a different result.  Suddenly, there is an incentive to differentiate and diverge. …

Similarly, in politics, the model suggests that, in three-party systems, parties will no longer all cuddle up to the median voter but some will offer more radical policy choices.  It’s argued, as with consumer markets, that this leads to a more lively democracy.

The release of the Labour/Green electricity policy suggests something like this is happening in New Zealand.

The Greens are now clearly established as a permanent third party, with the other small parties melting away.  Professor Hotelling and his academic heirs could have told us this would likely lead to something like the electricity policy, which has already wiped hundreds of millions from the Crown balance sheet, including the SOE portfolio and the ACC and Superannuation funds, and from KiwiSaver accounts.

This explains why Labour has adopted so many Green party policies.

It is no good Labour/Green saying the policy is not radical by arguing that something like it has been implemented elsewhere.  That would be like National saying a 15% flat tax is not radical in a New Zealand context by pointing to Hong Kong.

Exactly. As pointed out previously, the model they cite has generally been adopted in countries moving from a totally nationalised power industry to one with some competition. It has never been used in a country which already has 14 competitive generating companies.

Here’s a competition for readers. See if you can identify all the Labour Party policies that they have stolen from the Greens? Abolishing youth rates was Greens policy, and resisted by Labour initially. As was massive hikes in the minimum wage, and extending paid parental leave.

We also have their lurch to the left on monetary policy, and their nationalisation agenda and the extending Working for Families credits to beneficiary families.

What others ones are there?

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Hooton on beltway politics

April 7th, 2013 at 9:00 am by David Farrar

Matthew Hooton has a very good piece in NBR on beltway politics.

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Hooton on asset sales

March 11th, 2013 at 9:00 am by David Farrar

Matthew Hooton writes in NBR:

What Mr Peters may recognise, but Labour does not, is that, before Mr Key suggested the share issues, most voters had never heard of Mighty River Power, Meridian Energy, Genesis or Solid Energy, much less worried about their ownership structure.

Compared with disposable incomes, the local school competently teaching maths, grandma getting her hip replacement, the cops tracking down the local crims or even keeping Asian immigrants out, whether a Waikato River dam is owned 100% or 51% by the state simply doesn’t rate.

The actual policies of those who claim to oppose share issues prove it.

Through nine years of the Helen Clark regime, when a global economic boom fuelled massive fiscal surpluses, the government bought back not a single share in Contact Energy.

Nor did Phil Goff promise to buy back shares in Contact.  Nor does Mr Shearer promise to buy back shares in the companies Mr Key plans to list.

If it is OK for national symbols such as the Clyde Dam and the Wairakei geothermal network to be 100% privately owned – and majority foreign owned – how could it possibly matter that Waikato River dams will be only 51% government owned and perhaps 20% foreign owned?

Matthew gets it right on. The opposition is symbolic bluster.

While averse to nationalisation, Labour also argues that not a single share in any of the Crown’s $50 billion of commercial companies should ever be sold – in effect freezing more than $30,000 per New Zealand household in a portfolio that is a mere legacy of the tumult of the 1980s and 90s.

This is the perverse logic of Labour’s stance. They are basically arguing that the exact right number of power companies for the Government to own is three out of five. Not two, not four – exactly three.

The ideological opposition to the private sector means that we don’t have an intelligent conversation over what assets should be state owned and which should not. Instead we just have a die in the ditch defence of the status quo no matter how illogical it might be.

Arguments that the state must own 100% of “strategic assets” – a meaningless phrase, never defined – would suggest the government should nationalise all food production and distribution, something Labour is yet to propose.

In fact, an immovable asset producing a commodity involving no proprietary intellectual property would seem to be exactly the sort of thing where ownership is irrelevant.

Absolutely. There is a far stronger case for the Government to own Fonterra than a power company.

The Greens are happy that their anti-asset-sale petition has won them tens of thousands of new email addresses to spam in election year.

And they used taxpayer money to collect them! I bet you everyone who signed that petition will get an e-mail from them if they gave an e-mail address.

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Hooton on Cunliffe

February 5th, 2013 at 3:00 pm by David Farrar

Matthew Hooton writes in NBR:

David Shearer has again faced down his rival, David Cunliffe. Now he must decide what to do with him. …

Despite having been confirmed as party leader three times in a little over a year, Mr Shearer can have no confidence that Mr Cunliffe will accept today’s result by behaving any differently than his record suggests.

There is no point trying to unify the party by granting the New Lynn MP a senior role. The Clark/Cullen or Brash/English olive-branch approach just won’t work.

Mr Shearer should look instead at how Mr Key and Mr English ruthlessly despatched Dr Brash in 2006 as his model.

By getting him out of parliament altogether, Mr Key made sure Dr Brash could not become a focal point for any National MPs who were uncomfortable with the centrist direction he intended to take the party.

Any suggestion Dr Brash might ever return to the leadership was pre-emptively void and National was accordingly unified around the new direction Mr Key and Mr English had decided to take the party.

Mr Cunliffe and his crew have been a drag on Labour’s ability to unify for four years and there is no sign they have any intention of changing. The best way for Mr Shearer to unify the party is to cut his throat now by indicating he will never be returned to a senior role.

 If it leads to a byelection in New Lynn, so much the better. Byelections are always good for oppositions and Mr Shearer’s promise of 100,000 cheap houses is bound to be popular among Labour voters out west.

I disagree with Matthew on this. I think that Shearer should give Cunliffe a meaningful portfolio in the reshuffle, and offer him a path back the front bench.  Of course he can not return to the front bench immediately, but there should be a path back. The best thing to do would be to give him a chunky portfolio, but away from anything economic as that may allow him to upstage Parker.

Health wouldn’t be a bad pick for Cunliffe. He is a former Minister. No other health spokesperson (including Grant Robertson) has come close to ruffling Tony Ryall. If Cunliffe could hurt the Government on health, that would be the sort of win that would make it possible to then put him back on the front bench.

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The benefits of hands off

February 3rd, 2013 at 8:09 am by David Farrar

Matthew Hooton writes in NBR:

The bigger the lie, the more likely it will be believed.

Today’s left wails that the global financial crisis has undermined the case for so-called neoliberal economics: free and open economies, price stability as the primary goal of monetary policy, freely traded currencies, prudent fiscal policy and private ownership of productive assets.

David Shearer says “the hands-off, leave-it-to-the-market approach has failed all over the world.” Labour/Green will be “hands on.”

Matthew provides a table to compare how well hands-off and hands-on countries are doing:

OpeningSalvoTable2-440x312

 

Hooton notes:

According to the Heritage Foundation’s Index of Economic Freedom, the world’s six freest economies are Hong Kong, Singapore, Australia, New Zealand, Switzerland and Canada (see table).

These six have avoided anything like the deep and prolonged recessions of more interventionist countries.

The IMF continues to forecast higher growth for the six than for countries further down the freedom list.

Even more important, both unemployment and youth unemployment are lower in the more free-market economies.

While I don’t think the labels hands-on and hands-off are particularly meaningful, I absolutely agree with Matthew that the freer the economy the more it tends to grow, and the more jobs are created.

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Hooton on Labour

January 27th, 2013 at 9:00 am by David Farrar

Matthew Hooton at NBR writes:

The wreckers of Labour’s November conference are again destabilising David Shearer’s leadership. They are likely to keep doing so all the way to the election.

Ahead of the conference, Mr Shearer was subject to an either controlled or spontaneous avalanche of criticism from across the left establishment, including Labour-connected press galley journalists, the Herald’s Tapu Misa, Helen Clark’s hagiographer Brian Edwards, the left’s poet laureate Chris Trotter and the anonymous and semi-anonymous writers and commentators atThe Standard

As might be expected from New Zealand’s most-read and most influential left-wing blog, The Standard is a more collective effort than its right-wing rivals.

And what has he been reading there:

For some time, blogs have ceased to merely report grass-roots political activity: they are now where much grass-roots political activity actually occurs, with hundreds of different perspectives being put forward on various topics.

A generation ago, political reporters hung around dire regional conferences to get a sense of what the grassroots were feeling.

With little happening at today’s stage-managed conferences, it makes sense that they now observe the postings and comments on blogs such as Whaleoil, Kiwiblog and The Standard to get a sense of grass-roots opinion (noting, as always, that conference delegates and blog writers tend to be further to the extremes of the parties to which they purport allegiance).

Even with that proviso, the extreme language at The Standard about Mr Shearer is unprecedented, and it is again being ramped up.

A nickname for Mr Shearer has emerged: Captain Mumblefuck. His intelligence and admittedly poor diction are derided.

We are told he is a bully and coward for demoting Mr Cunliffe, and a puppet of Trevor Mallard and Annette King. He is accused of appeasing the middle class, his 100,000-house KiwiBuild policy is criticised as a veneer for public private partnerships and he is widely suspected of having a secret neoliberal agenda. 

Elsewhere, based on research by Mr Trotter, some even hint he may be some sort of agent for foreign intelligence services.

I think it is fair to say that far nicer thing are said about David Shearer on Kiwiblog, than at The Standard.

To pressure him, a false rumour was spread in recent days that Mr Shearer planned to announce this weekend a membership and union vote. The motivation is because most Standardistas are confident he would lose.

In anticipation, people are being encouraged to join the party for the very purpose of voting against its leader and for the candidate, Mr Cunliffe, bizarrely seen as far left.

Internal fanaticism
This sort of internal fanaticism has been seen before, including when Don Brash’s supporters were undermining Bill English and when Paul Keating took out Bob Hawke. The strategy can work because, as Mr Hawke observed, it has a terrifying logic. 

If I recall correctly, Matthew was one of those internal fanatics he is citing, so he knows what he is talking about :-)

If a challenger’s faction, even a minority, is utterly determined to make life impossible for the incumbent, then eventually the leadership or even prime ministership ceases to be worth holding.

Labour’s new rules make the strategy even more likely to succeed and have created a risk of chronic instability. With members and unions now having the power to choose the leader, whichever faction happens to be in the minority will spend its time not taking the fight to the dreaded Tories, but signing up new members and manipulating union personnel.

The new rules put Labour at constant risk of old-fashioned Leninist entrism. Already, party bosses report infiltration by former members of the Alliance who have no interest in being part of a modern social democratic party but want to recreate Labour as a replica of their old far-left ideal.

Mr Shearer has a big speech this weekend. He would be well advised to throw some red meat to his far left to settle them down a bit. But the subversion by Mr Cunliffe’s supporters will continue all year. There is another meltdown ahead.

Interestingly, Mike Smith (who works in Shearer’s Office, and is a trustee of The Standard) did a relatively mild post chiding another Standard author for telling porkies about the Labour leadership.

The response has been a virtual lynching of Mr Smith for daring to criticise another author.

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The Tamihere issue

November 10th, 2012 at 11:39 am by David Farrar

Matthew Hooton writes in NBR:

Labour’s New Zealand Council will soon consider John Tamihere’s application to re-join the party.

Despite Mr Tamihere being encouraged by current leader David Shearer, who believes he would make a fine social development minister, the council faces a terrible dilemma.

Either choice will define Labour for a generation – neither in a good way.

But will the Council overlook:

On the other, Mr Tamihere has offended all the party’s factions.

The Women’s Council may have forgiven him calling them “frontbums” and for slamming Helen Clark.

But, since leaving parliament, Mr Tamihere has continued to be an outspoken critic of identity politics, including feminism.

A year ago, he attacked David Cunliffe for selecting Nanaia Mahuta as his running mate: ”The only thing she’s lacking is a limp.  Then he would have got the disabled vote too.”

Choosing her made Mr Cunliffe “smarmy,” he said.

His relations with Rainbow Labour are no better, having called gay people a health hazard to the rest of the community.

Nor is Mr Tamihere a friend of the unions.

Then, in February, he backed Act’s charter schools policy, planning to set one up.

“All we’re looking at doing,” he said, “is bringing the best practice from Remuera to the west.”

Mr Tamihere has also lost friends in Labour’s caucus.

A month ago, he criticised them on national TV: “The front bench is not firing, across the whole line, whether it’s health, welfare or education.”

I think it would be great for Labour to have a member and MP who supports charter schools!

Nevertheless, rejecting Mr Tamihere is also fraught with risk.

There is almost no precedent for a rejection, and certainly none involving a person of his calibre.

A judicial review would be certain and no doubt Mr Tamihere is already operating with the benefit of legal counsel.

Mr Shearer’s encouragement of Mr Tamihere’s return would surely be brought up in court and it would be argued the council, dominated by unionists and Rainbow Labour, was not an impartial jury.

If Shearer has encouraged him to join, and the Council declines, I think it would show Robertson is in control of the party.

Even worse for Labour are the political risks.

Mr Tamihere and Winston Peters are again on good terms.

If Mr Tamihere joined NZ First, the two could hit the road in the provinces and West Auckland portraying Labour as controlled by feminists and gays with no residual interest in good old working-class kiwi blokes.

That would undoubtedly transfer 5% of the vote from Labour to NZ First, putting the former down to 25% and the latter well above 10%.

Mr Tamihere may dream of being social development minister in a Labour-led government.

But, if his membership application fails, it’s not impossible to imagine him as social development minister in a National/NZ First coalition.

An intriguing thought. However I seem to recall there is some bad blood at the family level between Tamihere and Peters.

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Hooton scores Labour’s frontbench

October 7th, 2012 at 7:00 am by David Farrar

Matthew Hooton writes in NBR:

As David Shearer prepares to dust off Labour’s front bench, David Cunliffe plots his dust up with Mr Shearer.  Here’s a report card for the last 10 months:

David Shearer, Leader – 5/10
Hapless and ever-less-confident media performer, except on TV3 comedy shows.  Failed to build cohesive team.  Caught inventing stories about painters.  Lost control of his own office, now staffed by Grant Robertson loyalists.  Faces leadership challenge before Christmas.  Only KPI, though, is becoming prime minister.  If he holds on as leader, recent polls suggest that’s what he’ll be in two years.  Five points for that alone.

Grant Robertson, Deputy Leader, Environment – 3/10
Allowed Tim Groser to defang the ETS without political cost, making Labour cheerleader Rod Oram the lone campaigner against the changes.  Has provided no public support for his leader, fuelling destabilising leadership speculation.  Points for achieving more control over the party apparatus than Helen Clark in her prime.

David Parker, Finance
7/10

His plans to intervene in currency markets to drive up the Australian and US dollars are nuts, but are at least bold and have people talking, even if he will ultimately lose the intellectual debate.  Needs to package his ideas more coherently and learn to distil difficult concepts into fewer words.

Jacinda Ardern, Welfare
1/10

Failed utterly to confront Paula Bennett’s welfare reforms, despite the beneficiaries burdened with new obligations being a key Labour voting bloc.  Wins a point for leadership on gay adoption, targeting her Grey Lynn constituency.

David Cunliffe, Economic Development
4/10

Should be sacked for disloyalty.  Gives cliché-ridden think-speeches, with excruciatingly laboured analogies.  Panders to Labour’s left by advocating 19th century mercantilism, which he can’t possibly believe.  However, he’s the only Labour MP whose speeches anyone bothers to read and can articulate complex ideas.

Clayton Cosgrove, SOEs
6/10

Like Lianne Dalziel, manages to get under Gerry Brownlee’s skin occasionally, but can’t take any credit for Mr Key’s difficulties with the SOE floats.  Is meant to be Labour’s attack dog but has been over-shadowed by the Greens’ Russel Norman.  If he wants to be the tough guy, needs to fix the first name.

Shane Jones, On Gardening Leave
0/10

So much hype, for so many years.  So little to show for it.  Pro-business attitudes not a good fit with his party. Walking advertisement for political mercy killing.

Nanaia Mahuta, Education
0/10

Has done nothing.  Will be sacked.  Mr Shearer should demonstrate importance of education to Labour by taking portfolio himself, a la Peter Fraser and David Lange.

Maryan Street, Health
1/10

Wins a point for promoting euthanasia law reform, but voters probably expect potential health ministers to focus more on curing people than killing them.

Su’a William Sio, Employment
0/10

Unemployment is touching 7%.   High profile job losses at Solid Energy, Tiwai Point and Kawerau.  Ever heard of William Sio?

For those who want to do the maths, that is an average of 2.7.
Hooton’s solution:

His best performer is Phil Goff, who severely damaged National’s master strategist Murray McCully over restructuring at the foreign ministry.  He and Annette King deserve to be returned to the front bench.

  A more constructive role for Trevor Mallard should be found.

  Even bolder, Mr Shearer should announce that John Tamihere will be his social welfare minister.  It is nothing more than has already been mused privately.

  It is also time to move up new talent like Andrew Little – although strangely he has been overshadowed in ACC by the Greens’ Kevin Hague.

  The Reverend Dr David Clark is targeting an economic role and there is more to him than being one of the world’s leading experts on Christian existentialism.

  Chris Hipkins has done well tackling Hekia Parata.

It will be very interesting to see who get promoted and demoted in the reshuffle. Will Shearer be bold?

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Hooton on opposition strategy

August 17th, 2012 at 9:00 am by David Farrar

Former Labour general secretary Mike Smith responds to Rob Salmond on what should be Labour’s strategy:

Thanks to Rob Salmond and Josie Pagani, it is now clear that Labour’s pitch to the  centre is an intentional strategy. That is helpful as now perhaps we can have a reasonable discussion about how well it’s working, and what else might work better. …

In what is presumably Rob’s moderating policy option, attacking teacher and beneficiary straw men isn’t aspirational. It’s telling them they’re all crap. And it’s no answer to the truck-driver’s challenge.

The trouble is Labour stlll sounds miserable. Using another of Rob’s options they seem to be trying to alter voters’ perceptions of National, by relentless oppositional criticism of what National’s doing wrong. The problem with this is that it creates the impression that they don’t know what to do about it themselves. National is doing a good enough job of getting it wrong all by itself. It doesn’t need a lot of extra help.

Rob makes a crucial  point about the importance of timeframes. The next election is now a little over two years away. At some stage Labour has to look and sound like an alternative government, with relevant policies and messages that resonate with the teacher, the truckdriver, and the beneficiary. Right now would be a good time to start getting it together.

In a comment on that thread Matthew Hooton gives some pro bono advice on how to be an effective opposition:

I hope you don’t mind me helping, but what an opposition should do is choose a high-profile and unpopular target, with which the government is associated and is required to defend, and attack it. The choice of the target should also define a positive message for the opposition.

The best example of this in recent time is of course Don Brash and his infamous Orewa speech (which readers of the Hollow Men will know I opposed and which I give only as an example of the theory rather than suggesting Shearer follow the same policy path).

Brash’s positive policy message was “One Law For All” but Bill English had been banging away on that for years. What Brash did was attack the unpopular treaty industry etc, the Labour govt felt obliged to defend it, the public decided which side it was on (National’s), and Brash would have become prime minister had he not been caught flirting with the loony Christian right. …

Similarly, in the early 1990s, when he was leaving National, Winston Peters attacked Fay Richwhite and others involved in the winebox. They were undoubtedly unpopular but National appeared to defend them by refusing to have an inquiry. Again, that worked pretty well for Peters and note that while his message was framed negatively – “Fay Richwhite are crooks” – there was also an underlying positive message: “Winston Peters will make the rich pay their taxes”.

Earlier, on a bigger stage, David Lange followed the same path when he attacked nuclear ships. National and the US defended nuclear ships. Labour’s vote increased between 1984 and 1987. …

Also note, the target can be anything as long as it is unpopular, bound to be defended by your opponents and says something about you by your choice of it. A National opposition can attack “overbearing unions” or “political correctness gone mad”. The obvious one for Labour is “big business”.

We await the first Labour Party speech attacking big business!

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Fran on Christchurch

August 4th, 2012 at 12:01 pm by David Farrar

Fran O’Sullivan writes:

I’ve really drunk the Kool Aid when it comes to the inspirational blueprint for Christchurch’s new CBD. It is a stunner. Compact. Cutting edge. Green. Sustainable.

It was crunched out in just over 100 days; a brilliant demonstration of that old maxim “pressure makes a diamond”.

It is also a plan that all New Zealanders need to embrace.

I doubt many of us seriously appreciated that the whole of New Zealand is pretty much a seismic zone until the devastating Canterbury earthquakes hit.

Yeah I thought it was just Wellington that was going to get a big one.

But I’ll never forget the look of abject horror on the faces of the hundreds of people who poured out of the Christchurch CBD after the 6.3 magnitude quake that struck on February 22, 2011 … or the grim chat I had with Mayor Bob Parker at the Christchurch Art Gallery shortly afterwards when he told me “there has been serious death”. Nor will I forget the sincerity of former US Secretary of State Richard Armitage, also in Christchurch when the quake struck, who later that afternoon told me the United States had instantly offered assistance from its own military based in Hawaii.

Disasters do bring out the best in people, as we band together. The memory for me is the Australian police officers and others landing in Christchurch to cheery crowds.

Key has now ordered them to get the L-shaped frame of parks which will surround the new CBD in place by the end of 2013. Decisions will be made super fast. Most will bypass the Resource Management Act.

The tempo will be fast.

If anyone doubts just how fast officialdom can work when the whip is cracked just consider the AMI stadium. David McConnell’s Hawkins Construction got that up in 11 weeks.

Which has proved to be excellent.

The brute reality is that before the quakes struck Christchurch was effectively dying. The very compactness of this new city heart will ensure its vibrancy.

Something I have said also.

What if other New Zealand cities – particularly Auckland – were given the tools so they too could follow Christchurch’s example and wipe the barriers that stymie economic growth?

Hear hear. Matthew Hooton also writes in NBR:

The government has created a major political risk for itself given the sheer brilliance of its new Christchurch plan.

I try to strictly avoid writing here about anything I am working on in my day job but, like everything else that has happened in Christchurch these last 21 months, this is a once-in-a-lifetime exception.

The Christchurch plan is the result of two madcap ideas by sometimes uneasy bedfellows, Christchurch mayor Bob Parker and earthquake czar Gerry Brownlee.

  Mr Parker led his council’s “Share an Idea” campaign where the people of Christchurch got to say what they wanted in their new city.  

It wasn’t the typically stifling local government “consultation” exercise.  Lawyers, formal submissions and correct spelling and grammar were not welcome.  People just got to scribble down in their own words what they wanted.

Over 100,000 Cantabrians responded, more than a quarter of Christchurch’s population.  The campaign became the first community engagement programme outside Europe to win the international Co-Creation Association’s supreme award and it did so unanimously.

The lawyers and lobbyists who make it their business to get between the public and their elected officials were sidelined.

I wasn’t aware of the award.

The plan is radical and far more clean, green, politically-correct and urban-design-y than would be expected to be signed off by the sometimes gruff and usually conservative Mr Brownlee.  There are all sorts of parks and art and culture hubs and so forth.  Christchurch will be the most beautiful city in the world.

But the plan is far more commercially astute than might be expected from the urban designers and creative types who prepared it. 

It halves the size of the CBD, making land scarce to improve returns per square metre, creating competition among investors and developers for the best spaces.  There is going to be a gold rush.

What is interesting is that the Property Council has welcomed the plan. They represent the property owners who have the capital that is essential to making the plan a reality. They were negative on the original plan, but have been supportive of this final one, which is a good and important thing.

Decisions will be made on urban design resource consents within five working days, by a three-person committee representing the government, the city council and Ngai Tahu and they will not then need to be notified under the Resource Management Act.

Proposals will of course need to be pretty, clean and green and fit the plan but the tradeoff is that developers get a final answer in a week.

Mr Parker’s city council has then resolved to make final decisions on all other aspects of building consent applications within a fortnight. …

Do Aucklanders need to wait for Rangitoto to erupt before Len Brown will launch a community engagement programme about its spatial plan as good as Mr Parker’s “Share an Idea”?

Do Dunedites need to suffer some sort of biblical-type flood before their leaders will develop an innovative 100-day plan to deal with some of the same long-term economic challenges that were faced by Christchurch?

Do Wellingtonians need to suffer their major earthquake before they get access to 24-hour investment services, five-day resource consent decisions and two-week building consents?

Does the Waikato need to be devastated by mad cow disease before delays at the OIO and Immigration Service are sorted out?

For that matter, why on earth doesn’t the government roll out its bold, visionary Christchurch approach on a nationwide basis and just slash all the barriers to economic growth that still exist everywhere but Canterbury?

A roadmap to growth.

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Hooton on MFAT

March 8th, 2012 at 4:00 pm by David Farrar

A good column in the NBR by Matthew Hooton:

Murray McCully may be positioning himself as a fiscal enforcer but he’s really a bit of a wuss.

Proposed $25 million cuts to the Ministry of Foreign Affairs and Trade ( Mfat), making 305 mostly Wellington-based bureaucrats redundant, simply bring it back to where it was in 2007/8 before Winston Peters announced his massive $600-million five-year spend-up.

Which was in fact more money than MFAT even wanted. He told them to triple the size of their budget bid around 24 hours before the deadline.

After all, Mfat, under its existing budgets, had successfully negotiated CER, the Uruguay Round agreement, the free-trade agreement with China and phase one of the Trans Pacific Partnership. It had won election to the UN Security Council, hosted Apec and CHOGM, installed Mike Moore and Don McKinnon to head the World Trade Organisation (WTO) and Commonwealth, and broadly restored relations with the US.

It wasn’t obvious it needed vastly more money than previous foreign minister Phil Goff had provided for six years.

Goff now seems more passionate about defending every last MFAT job, that anything he did as Opposition Leader.

Mr McCully’s more important changes involve not the number of personnel but their deployment.

Mfat has long been the most conservative of departments.

The only way in was its graduate programme. Time served drove promotion. No one was ever fired. Its employment agreements insist that older people have first entitlement to new positions over younger staff. Consequently, it struggles to retain talented 30-somethings.

To the fury of ageing baby boomers, Mr McCully has aggressively promoted top Gen X talent.

Vangelis Vitalis, 43, has been appointed ambassador to the EU and Nato; Taha Macpherson, 40, to Turkey, Israel, Jordan, and the Palestinian Authority; Reuben Levermore, 36, to the Philippines; and Justin Fepuleai, 38, to Afghanistan. Ben King, 39, is John Key’s new chief foreign policy advisor in the Department of Prime Minister and Cabinet.

While a late baby boomer, Patrick Rata has been appointed ambassador to South Korea after Mr McCully discovered him in a back-office role having committed the ultimate Mfat sin – taking a couple of years off mid-career, to be Mr Moore’s right-hand man at the World Trade Organisation.

Surprisingly, given Mr McCully’s ultra-partisan reputation, there has been no hint of political favouritism.

As a student leader, Mr Vitalis led protests against the National government in the early 1990s. Mr Macpherson spent three years as Mr Goff’s top aide. Mr King worked for trade minister Lockwood Smith, whom Mr McCully has fought in bitter intra-party warfare, and Mr Rata for Mr Moore. Dr Fepuleai’s PhD is in political science, surely something deserving Mr McCully’s scorn. Arguably only Mr Levermore fits the McCully stereotype, having played professional rugby in France.

With these and future appointments, Mr McCully has decided that talented Gen Xers shouldn’t have to wait until their late 40s or early 50s to reach the top tier. Nor should older talent be punished for working temporarily outside Mfat’s hallowed halls.

Not everyone at MFAT is unhappy with the changes. They are providing opportunities also.

As many as 166 kiwi diplomats are still stationed in the UK, continental Europe and the US, even excluding the delegations to the UN, WTO and Russia.

In comparison, just 23 diplomats are stationed in Australia, 41 in India and 44 in mainland China.

Mfat still has 11 diplomatic posts in Europe (excluding Geneva and Russia) but just two in Australia, two in China and one in India.

There is a full-scale embassy in Stockholm, which Helen Clark opened in 2008 and Mr McCully plans to close, and in Vienna, despite New Zealand’s exports to Sweden being just $72 million in 2010/11 and to Austria just $18 million.

In contrast, New Zealand has no presence in Chongqing, with its 30 million people and surging economy, nor is New Zealand represented in India’s boomtown of Bangalore.

Mr McCully is on the right track but he still has a long way to go to build a foreign service that properly reflects New Zealand’s place in the 21st century.

Matthew defends the changes so well, he could apply to be a ministerial press secretary :-)

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