Little blames Hooton for deaths threats against Bennett

March 30th, 2016 at 9:00 am by David Farrar

When you’re the Leader of the Opposition, and media ask you about vile online death threats against a Minister, your only response should be that they are totally unacceptable. Full stop.

To be fair Little did say they are unacceptable, but then he want on to excuse or blame them on the basis of the economy and most bizarrely Matthew Hooton.

The Herald reports:

Asked what was behind the threats to MPs, Mr Little said this afternoon that some New Zealanders were in a worse position compared to a year ago and were feeling less confident about the future.

Umm, compared to a year ago unemployment is down, economic growth is robust, inflation is down and interest rates are down. And oh yeah wages are up

Here’s the key stats:

  • Unemployment 5.3%, down 0.5%
  • Wages up 2.1% from a year ago
  • Inflation just 0.1% from a year ago (down 0.7%)
  • GDP up 2.5%
  • Mortgage rates 5.77%, down 0.94%

So even if you accept the stupidity of claiming that death threats are because the economy is worse than a year ago, the facts are that almost every economic indicator is better than a year ago.

But his rationalising gets worse:

“It’s not a justification for aggressive behaviour or even aggressive comments. But if you combine a sense that people are feeling that life is tougher along with this change in the tone of a lot of communications — some of which are coming from well-paid PR operatives too I might add — then it’s not surprising that there are some people who are going to read completely the wrong signal and think that it’s OK to make completely unacceptable comments.”

Mr Little appeared to single out lobbyist Matthew Hooton.

Asked by a reporter whether he was referring to Mr Hooton, he said “Could be”. He said the lobbyist had “a particularly vicious … edge to his communications”.

Mr Little said he could not cite specific communications off the top of his head.

“They have an edge to them, that is, I think, unfitting of somebody who claims to be a disinterested observer with right-wing leanings.”

Mr Hooton is a former National Party press secretary and is now an outspoken right-wing political commentator.

This is just bizarre.

Nothing Hooton writes is vicious let alone in any way along the spectrum of death threats.

Hooton writes robustly and provocatively. But to compare anything he has written with the filthy abuse from the likes of Phillip Bear is insane.

Hooton robustly criticises MPs in all parties. He has all but called for Murray McCully to be arrested for the Saudi farm affair. He attacks Steven Joyce more often than the combined Opposition. He has criticised John Key on numerous occasions. So for Little to suggest Hooton is some sort of National attack dog is ridiculous.

The best response to his stupidity comes from Hooton:

Asked to respond to Mr Little’s comments, Mr Hooton said the Labour leader was “an idiot” and he had “no idea” what he was referring to.

“I can’t think of anything that could be characterised as vicious over the last 12 months or so,” he said.

“I should probably seek an apology … but I don’t think he’s a person worth seeking an apology from.”


Oh and I missed this victim blaming in this article:

Labour leader Andrew Little said the threats against ministers were “ugly” and “had no place” in New Zealand’s political debate.

It was “hard to gauge” whether treatment of MPs was getting worse, he said. But he had observed a “palpable sense of anger” from voters which was not present a year ago.

“I think there is a lot of frustration and anger. People see a Government that looks increasingly arrogant, it’s smug and out of touch… and they are feeling frustrated.”

If you think the Government is out of touch or arrogant, you vote them out of office. You don’t make death threats.

Using Little’s logic I could argue that the anger is because Labour are such an incompetent opposition, left wing activists are in despair that they may have five terms in opposition, so they are resorting to violent threats.

That’s as sensible an argument as the one Little has made.

Hooton on the Future of Work

March 29th, 2016 at 2:00 pm by David Farrar

Matthew Hooton writes in NBR:

As Labour proceeds with its “Future of Work” process, it would be wise to have the humility to understand it will be almost completely wrong about how the world will be, not just a quarter century from now but even five years hence when it might be taking office. In fact, the tendency for change to accelerate means any specific forecasts about the future made in 2016 will almost certainly be even more embarrassingly wrong than those made in 1993.

Hooton makes the point that 20 years ago there was almost no commercial Internet. We know there will be change, but trying to work out exactly what that will be is near hopeless.

The policy prescriptions necessitated by constant change are fairly obvious, and always have been: New Zealand’s labour and capital markets must be more flexible than ever; the ability to switch resources including land from one use to another must be enhanced; world class general education, in particular in numeracy and literacy, is absolutely essential; the idea of doing three years of vocational training between the ages of 17 and 21 to win a meal ticket for life is absurd; people must be equipped to pick up new skills and change jobs rapidly as required; companies and governments must be capable of making decisions quickly; the tax system must not distort investment and labour flows; industry and regional assistance schemes and other corporate welfare can only ever act as brakes on innovation.


Labour’s problem is that these ideas are anathema to those who control it. So far, the policy ideas to emerge all seem exactly the same as a far-left Labour Party would promote without bothering with a “commission”: three free years of uni for school leavers, and $200 a week for everyone from the day they turn 18 until the day they die, at a cost of $38 billion a year.

This is the acid test – is Labour coming out with any policies that they didn’t want to do anyway? They’ve opposed every measure of flexibility to the labour market. Will they actually come up with a policy that would surprise people?

Sadly, today’s Labour is unable to accept, emotionally or intellectually, that the enormous creative power of billions of people working in a well-regulated free market will always makes fools of the most visionary “Future of Work” participants. All that is wise for any government to do is foster that creativity, accept that the future cannot be foretold and trust that human societies – as they always have done – will find ways to navigate from one era to the next perfectly competently without the likes of Andrew Little thinking he has any particular insight to impart.

Well said.

Hooton on Parker

March 15th, 2016 at 11:00 am by David Farrar

Matthew Hooton writes:

Among moderate Labour MPs and activists, and even the odd union boss, talk is now incessantly about the party’s leadership.

Alarm has been raised after Labour’s private polling showed it was down to just 30% in February, from 35% before Christmas.  Worse, those voters have not gone to the Greens but slipped back to National so that the gap between left and right is now wider than a month before Labour’s last election debacle.  Since Helen Clark’s fall, only under David Shearer’s more centrist leadership has the Labour-Green bloc regularly polled above National and its minor allies.


This is the average of public polls since 2012. Shearer took them from 28% to 35%.

These issues have in common that all three were so-called “captain’s calls.”  This has raised concern not just about today’s polls but also whether the current captain, Andrew Little, has sufficient feel for public opinion in West Auckland, Redwood, Shirley or provincial New Zealand to ever mount an effective challenge to John Key.  After all, Mr Little’s entire professional career has been Wellington-based, first as a paid student activist and then as a union and Labour Party official.  His forays to stand for election in 2011 and 2014 in his birthplace of New Plymouth, a strong Labour town under long-serving MP Harry Duynhoven, have both been disastrous.

Labour’s frontbench is dominated by Wellington based professional politicians.

Moderate Labour MPs believe the party is marching to another debacle next September.  In response, Little loyalists have begun talking about “the Kirk model,” noting that the revered Norman Kirk took three elections as leader of the opposition to become prime minister. Similar tolerance, they say, should be granted to Mr Little to allow him to claim the prize after Mr Key retires.

So their cunning plan is to win power in 2023, and govern for one term, before allowing National back in. I like it!

This is all largely academic because it is dawning on even Mr Little’s strongest internal critics that there is no way of dislodging him anyhow.  Mr Little only had first-round support of four of Labour’s MPs and a quarter of its members. He ultimately owes his leadership to Wellington union bosses exercising their influence over the final tally.  Labour MPs know that, if they seek to roll their beleaguered leader, the Wellington union bosses will just impose him back on them anyway, prompting an unrecoverable crisis for the party in its 100th anniversary year.  No one is yet that reckless.

An unsackable leader!

In his speech, Mr Parker focused on issues of capital allocation, making the case, without using the dreaded words, for a capital gains tax – an unmistakable challenge to Mr Little’s “captain’s call” that Labour should drop the issue.

Further contradicting another of Mr Little’s “captain’s calls” – that Labour must take a firmer line against the wild west of the business world – Mr Parker then argued cogently that capital raising in New Zealand is currently overregulated.  He made the case that the law goes much further than necessary to require proper disclosure of risk, that prospectus and audit costs are too high and directors’ liability excessive.  Such overregulation, Mr Parker says, is preventing medium-sized firms from attracting both capital and governance talent, hampering economic growth.

Very astute analysis from Parker.

At 3000 words, the speech was designed to be the kind of substantial effort one might expect from a Birch, Cullen or English in contrast to Mr Robertson’s vapid efforts.  Mr Parker was disappointed it didn’t get more attention.

Of course, who can foretell the future?  It may be, as Little loyalists insist, that Labour will move up in the March polls as students return to their campuses to discuss the tertiary education bribe.  But if the polls again move the other way, it is poor Mr Robertson who dissatisfied MPs plan to target for the chop.

Hooton’s speech to the ACT conference

March 7th, 2016 at 7:00 am by David Farrar

Some interesting aspects to Matthew Hooton’s speech to the ACT Conference.

This speech is about the complex relationship, that I think most of us in this room have, with John Key – and how Act might manage it better to your advantage in the future. The relationship is complex because, on one hand, John Key has massively exceeded any reasonable expectations as Prime Minister. But, in another way of looking at things, he’s also failed to live up to them.

John Key first came to prominence when he smashed Michael Cullen in the finance spokesmen’s debate in 2005, when he was broadly and largely loyally promoting Don Brash’s economic policy. And it became pretty clear he would become the next leader of the National Party when he gave an insightful speech on Singapore to the Auckland National Party conference in 2006.

To those of us in our 40s, who are now grey-haired, our political awakening had happened with the liberating social and economic changes of the mid 1980s and early 1990s. But we had to accept that if John Key was positioning himself to be New Zealand’s Lee Kuan Yew he wasn’t going to be the radical free-market liberal we might want.

But, if he were to be Lee Kuan Yew, he would be extremely ambitious for New Zealand. He would radically invest in infrastructure. He’d be an enemy of welfarism and sloth. He’d ensure New Zealand was open to the world and lightly regulated, at least in an economic if not a social sense. He’d be one of those driven, Asian-style, uniting yet transformational leaders. When it comes to the Lee Kuan Yew test, you can really only give him a “C” – maybe a “C+” on a good day.

But, on the other hand, as you get grey haired, the importance of reigniting the excitement of radical reform declines a bit. And it’s replaced with the over-riding need to keep the absolute lunatics in an Andrew Little-Grant Robertson-Matt McCartern-Metiria Turei-James Shaw-Winston Peters-Te Ururoa Flavell-Marama Fox-Hone Harawira-Laila Harre coalition out of office.

These are people who are mainlining their international trade policy from Jane Kelsey. They have been running around promoting an economic model from Tufts University, which I had never heard of, that assumes that all labour and capital is perfectly immobile. Under this model, the people who lost their jobs in 1998 at the Mitsubishi Plant in Porirua, the Nissan plant at Wiri, the Honda plant in Nelson and the Toyota plant in Thames are apparently still going to work each day, carrying their lunchboxes, and they sit staring at the machinery with which to assemble cars, and then go home at the end of the day. And they have been doing this for 18 years now, because, you know, labour and capital are perfectly immobile. Under Labour’s Tuft’s University model, no worker ever gets a new job. No machinery is ever decommissioned or used for something else. No one ever innovates or responds to new circumstances in any way. And this is seriously the sort of economic assumption that Labour and the Greens have been using to say the TPP would be bad for New Zealand. So keeping those lunatics away from office is absolutely paramount.

I don’t agree with Hooton’s assessment of what the Government has achieved – we have had welfare reform, tax reform, education reform etc. But from the point of view of an ACT voter, it is certainly modest.

The good news is that we can now see it actually working with charter schools. There are only – what? – half a dozen of them. One was a disastrous failure and they stole the money and has been shut down. A couple of them are outstanding successes. The others are doing just fine: good, decent neighbourhood schools. But the very fact they are there works as a check on the system. The teacher unions can’t get their friends in the bureaucracy to further dumb down the national curriculum, because there’s an independent free-market check, that at least some parents can access free of charge.

A good way to see charter schools.

Public policy is ultimately an averages game. What is pretty clear is that, on average, charter schools are going to teach kids better and meet community expectations better than state schools. And slowly the percentage of schools which are charter schools will grow. And that will also improve the quality of the state system. And that will progressively improve the life chances of more and more disadvantaged children. And that will enable them to thrive as people, and also to do better as part of the economy. And that will break down intergenerational disadvantage, and reduce poverty and misery. And you can see its classic John Key incrementalism in practice. And you can also see why the teacher unions need to put a stop to this right now. God knows where it could lead.

It is about direction more than speed.

Your best strategy over the next 17 months before the election is to more clearly distinguish yourself from National. David Seymour, at great personal cost, made that strategy possible when he turned down a higher-paying minister’s job to avoid being more tightly bound to National under cabinet collective responsibility. I’ve never heard of a politician making that decision before. It speaks to David’s integrity.

It does.

Hooton on Labour’s free fees

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

Matthew Hooton writes in NBR:

The year’s first polls are disastrous for beleaguered Labour leader Andrew Little.

According to Roy Morgan, the Labour/Green bloc is stagnant on 41.5%.  Arguably worse is TVNZ’s Colmar Brunton poll which has the axis down 3% to 40%.  This is not quite the Brashian 17% boost Mr Little hoped when he rose outside Auckland University last month to announce Labour’s ‘free’ tertiary education policy.

The policy was classic Revenge of the Nerds. Mr Little and his finance spokesman Grant Robertson began their careers as presidents of the New Zealand University Students’ Association in the 1980s and 1990s. Their belief has never been shaken that the taxpayer should pay all the expenses for school leavers to do arts degrees in political studies, philosophy and public policy as they did.

Almost every major spokesperson for Labour in this area is a former student union president.

This is only the start of Labour’s problems with the failed policy.  Right now, the party is making much of its so-called Future of Work Commission in which Mr Little and Mr Robertson are trying to decide what sort of jobs we’ll all have in 2035.

The initiative is similar to one by Social Credit in the 1970s when it worried about the impact of the computer and is utterly lampoonable. The idea that anyone – least of all a bunch of Labour luminaries – has any real insight into what economic and technological changes the market will deliver over two decades is self-evidently absurd.  For evidence, just re-read similar claptrap written about the 2010s ahead of the turn of the millennium.

In 1995 there was no commercial Internet industry. Any predictions in 1995 about future jobs would have been pretty out.

Finally, just remember the ‘problem’ the new policy is meant to solve. In data out this week, we learn the median student loan balance is $14,421. Half of students and former students owe less than this. It doesn’t really seem like an issue worth closing all your other fiscal options to address.

And the average extra income from a degree is $1.5 million so a damn good investment.

Kelsey briefing Labour staff on TPP

January 29th, 2016 at 2:00 pm by David Farrar

It shows how left Labour have gone that they have not just abandoned decades of bipartisan support on trade policy, but have so closely aligned with Jane Kelsey (who also opposed all the trade deals they did in Government). They are even arranging special meetings of Labour staff to get briefed by her.

But what is even more interesting is that a Labour staffer or MP leaked the e-mail to Hooton. That shows how deeply divided they are over this shifting of the party to the hard left on this issue.

Hooton on Labour reshuffle

December 6th, 2015 at 10:00 am by David Farrar

Matthew Hooton writes in NBR:

There were some good things about his reshuffle.  Has-beens Trevor Mallard, Ruth Dyson and David Cunliffe have all been ritually humiliated as a signal it is time to find new jobs.  The same message has been sent to never-will-bes Clare Curran, Kris Faafoi and Rino Tirikatene.  It is right that more dignity has been given to temporary deputy leader Annette King.

More substantially, the education portfolio is no longer split and has been reunified around Chris Hipkins, recognising the crucial importance of the transition from secondary school to higher education.  Phil Twyford has been recognised for his Chinese-sounding-names stunt.  Kelvin Davis has been given the promotion he has earned for his stance on Christmas Island and Nanaia Mahuta the demotion she so richly deserves for contributing nothing since first being elected to Parliament nearly 20 years ago.

Poll favourite Jacinda Ardern has been given a light workload so that she can concentrate on her media profile.  Labour’s right wing has adequate representation in the shadow cabinet with Clayton Cosgrove, Stuart Nash and Peeni Henare all sneaking in on the bottom rung.  As noted, while we know that the left-leaning Mr Robertson and Ms Sepuloni are expected to do the heavy lifting in economic and social policy, the right-wing David Shearer will be responsible for foreign policy.  To remove ambiguity over the Trans-Pacific Partnership (TPP), Mr Little has appointed an opponent of the deal, David Clark, to look after trade, replacing the pro-TPP David Parker.

One day, perhaps all these people will be famous.  More likely, given Labour’s fundamentally flawed brand, you’ll never hear of most of them again.  And even if Mr Little makes it to the prime ministership, nearly half his team will have to make way for ministers from the Greens and New Zealand First. 

This is a key point. Only the first 12 Labour MPs are guaranteed to be in Cabinet, even if there is a change of Government.

Shearer, Lees-Galloway, Sio, Moroney, O’Connor, Cosgrove, Nash, Whaitri, Salesa, and Henare may only be Select Committee Chairs or Ministers outside Cabinet.

Hooton flays Little on India claims

October 18th, 2015 at 10:00 am by David Farrar

Matthew Hooton writes at NBR:

Mr Little has suggested trade negotiators and exporters of dairy and beef products should turn away from the TPP region and instead focus on India and Indonesia.

It appears the pretender to the prime ministership is unaware New Zealand already has an FTA with Indonesia as part of the historic Asean-CER deal, launched by Helen Clark in 2004 and completed by Mr Groser in 2009. As a result, bone-in meat is already tariff free and boneless cuts will become tariff free in 2020.  For dairy, almost all tariffs are now below 5% and falling.  Tariffs on wholemilk powder, butter and cheese are zero.

So one of the two countries Little suggested we focus on getting a trade agreement with, we already have! Not inspiring. But it gets better:

Mr Little’s comments about India were even more stunningly ignorant.  Did he not learn in primary school the role of the cow in Hinduism and in Indian village life?  Is he not aware the current Hindu-nationalist government is affording them further protection, including with the help of the army?

These religious beliefs mean India is the world’s biggest milk producer, with 16% of total production, and it more jealously protects its dairy producers than even the US, Canada or the EU.

The prospects for beef exporters are even worse.

There is not just a taboo around eating beef but the sale or slaughter of cows is actually illegal in 24 of India’s 29 states.  Anyone who has spent even a few days in India knows that, where beef is sold, it is done so surreptitiously in back alleys in Muslim compounds, or out of sight at flash hotels, and is usually buffalo meat anyway.  To avoid violence by Hindu extremists, McDonalds sells only chicken burgers, even dropping its lamb Maharaja Mac in 2002 to avoid confusion.

Claiming India might offer dairy and beef exporters a practical alternative to the TPP region suggests Mr Little was just blabbing about topics he knows absolutely nothing about.

This really shows how much Little is winging it and just saying whatever comes to mind, rather than having any credible position.

Maybe next Little will propose we try and target pork sales to Israel?

Hooton on Labour and TPP

October 9th, 2015 at 3:00 pm by David Farrar

Matthew Hooton writes:

John Key must be sorely tempted to put the Trans-Pacific Partnership (TPP) to a formal ratification vote in parliament. If the prime minister did so, he would split the ridiculous rabble that sits across from him.

Two former Labour leaders, Phil Goff and David Shearer, would cross the floor to back the deal, along with Napier MP Stuart Nash, Te Tai Tokerau MP Kelvin Davis and Tāmaki Makaurau MP Peeni Henare, party insiders say. They alone would inherit Peter Fraser, Norman Kirk, David Lange and Helen Clark’s liberal-internationalist mantle.

There is no vote on ratification, but there will be a vote on legislation to implement parts of it.

For 20 years, New Zealand’s number one foreign policy goal has been a free-trade agreement (FTA) with the world’s largest economy, the US. If the TPP is ratified – which remains a big if – that NZ-US FTA has now been achieved, and FTAs with the world’s third and 11th largest economies, Japan and Canada, both hitherto highly protectionist, have been thrown into the bargain.

That’s three of the G7.

As a first tentative step in the long-term strategy, Dr Smith and Mrs Shipley launched negotiations in September 1999 for an FTA with Singapore, an agreement without economic significance but designed as a template for a wider 21st century deal.

The greatest share of political credit, though, lies with Ms Clark and her trade ministers Jim Sutton and Mr Goff.

It was the Clark government that concluded the Singapore deal, launched and completed the initial TPP with Singapore, Chile and Brunei and then drew in the US, Australia, Peru and Vietnam in 2008, following Ms Clark’s successful 2007 meeting with George W Bush.

The New Zealand origins of the deal are why Wellington had the diplomatic honour of being the depository and administrator of the treaty.

Worth remembering that. This is not a deal that the US approach NZ with. This was part of a 20 year strategy by both National and Labour Governments to get an FTA with the US.

To take one somewhat ironic example of the deal’s effects, given the music industry’s usual politics, the TPP’s copyright provisions mean the likes of Lorde, Tiki Taane, and SIX60 have ended up bigger winners from the TPP than Fonterra – which is surely fair enough given they actually bother to add value to their raw material and market it creatively offshore.

I don’t support the extension of the term of copyright to life plus 70 years, but did note on Twitter today that Lorde’s great grand children will be happy they can get money from her music in the year 2167!

The TPP also includes rules demanding higher labour and environmental standards, which are enforceable through ISDS, a first for a trade deal of this nature. Pharmac is left alone. Tobacco companies are excluded from being able to benefit from the deal. The Treaty of Waitangi is protected. So are marine mammals and even sharks.

If Labour vote against, they will be voting against an agreement that no member can weaken their environmental or labour laws and must introduce a minimum wage.

The union bosses, student politicians and former Alliance activists who now control Labour will have none of this.

Under Labour’s new rules that further empower its more fanatical grass-root members, the party has fallen under the spell of UK Labour’s Jeremy Corbyn, unwavering anti-globalisation activist Jane Kelsey, Marxist twitter addicts and extreme-left bloggers at The Standard and The Daily Blog.

The party’s antics over the TPP this week suggest its missing-in-action leader, Mr Little, and its woeful finance spokesman, Grant Robertson, have never moved on from their time leading student rabble as presidents of the New Zealand University Students’ Association.

The student politicians have taken over the party!

Mr Little’s chief of staff is Matt McCarten, the former Alliance president who broke with Jim Anderton because the then deputy prime minister believed New Zealand should support the US in retaliating against Al Qaeda in Afghanistan for the September 11 attacks.

Insiders say that when Labour’s senior MPs and staff discuss policy and political positioning, the likely reaction of the left-wing Twitterati and blogsophere is given greater weight than that of any union, environmental group or social-policy advocates, let alone any industry association or business.

Surely this is not true?

The party’s hierarchy is now seriously considering actively campaigning against the TPP and making a manifesto commitment to activate the agreement’s withdrawal procedures should it become government.

It would be good for National if they do, but bad for NZ to have Labour go further left.

You read that right: today’s Labour hierarchy is seriously considering promising to withdraw from a trade deal with 40% of the world’s economy, including the US, Japan and Canada, for which Ms Clark, its greatest prime minister for a generation and its first ever to win three elections, deserves the lion’s share of the credit.

Have nothing to do with these people. Do not give them money. Do not help them with their policy development. Do not let them visit your business for cute photo-ops designed to suggest today’s Labour is interested in listening to mainstream people. For all the current government’s usual purposelessness and drift, the lunatics now running Labour’s asylum must never be let near power.


UPDATE: Labour is denying an internal rift on TPP, which means of course there is one!

Hooton on Labour’s suspicion of the economy

June 15th, 2015 at 11:00 am by David Farrar

Matthew Hooton writes:

Labour’s finance spokesman, Grant Robertson, expresses this suspicion of “the economy” quite well.  As he puts it, fairly gently: “To me, the economy is only a means to an end to the kind of society we want, to the well-being of New Zealanders.”

This makes it sound like the economy is something that is the property of the Government!

For many in Labour, though, the sentiment is more extreme: “The economy” is something dirty and unpleasant; the other; something almost to be feared.  After all, talk in the 1980s of economic efficiency and reform – let alone the dreaded “neo-liberal orthodoxy” – is what created the horror of today’s satanic mills that replaced the workers’ paradise they seem to believe existed prior to 1984. Such talk created the vast underclass that these Grey Lynn and Wadestown liberals have read about on Bryan Bruce’s Facebook page and seen on Campbell Live.

The Grey Lynn and Wadestown sets are smart enough to know they must tolerate the continued existence of “the economy” but only because it is necessary to fund benefits for the  “missing million” and government-funded arts festivals for themselves.

Sadly this is only slightly exaggerated.

In contrast, Progress wanted Labour to take a more holistic view of who people are, how they live and where they want to be.  As they see it, in a 24-hour day, people want the opportunity to spend eight hours being involved in creating something meaningful and valuable at work.  They want another eight hours to enjoy time with their families and communities.  And they need the remaining eight hours for sleep in a safe, warm, comfortable home.

That’s a very good way to look at what people see as important – work, family, and home.

Hooton on Little

May 2nd, 2015 at 2:00 pm by David Farrar

Matthew Hooton writes at NBR:

Mr Little started strongly. His call in Parliament for Mr Key to “cut the crap and just apologise” risked being tut-tutted but it hit home beautifully after the prime minister’s ever more ludicrous denials over his staff’s abuse of SIS information.

As the number of such scandals increased late last year, Labour strategists advised their leader that Mr Key’s government was entering a terminal phase.  Based on the doctrine that “oppositions don’t win elections; governments lose them,” Labour’s backroom recommended Mr Little and his MPs largely drop out of the public eye and let the inevitable unfold.

The strategy reached its zenith with the decision – which I thought made a lot of sense at the time – not to contest the Northland byelection but implicitly back Winston Peters.  It was argued it would do more harm to National, and thus more good for Labour, for Mr Key’s numbers in Parliament to be cut than for Labour to run a serious campaign.  Sure enough, Mr Peters humiliated National in a seat it had held since 1943.

But whatever caused Mr Peters’ landslide – the Sabin cover up, the disgraceful bridges bribe, a weak candidate, Steven Joyce’s ham-fisted campaign, the thrill of voter rebellion without changing the government, the lure of a celebrity as local MP – it has had no wider impact on Mr Key’s poll numbers.  The overwhelming beneficiary has been Mr Peters who is now touching Mr Little in the preferred prime minister stakes. By far the main loser is the Labour leader who now polls worse than Phil Goff, David Shearer or David Cunliffe.

It was a strong start last year, but Little is now having to fight off Peters for the mantle of Opposition Leader. And the last two polls have Labour back in the 20s, not the 30s.

No red bus

It didn’t have to be this way. Mr Little could have hired a big red bus and travelled through Northland with his candidate and the press gallery, visiting some of the poorest parts of the country trying to shock middle New Zealand. Labour would ultimately have lost but Mr Little would have built up his profile, National would be burdened with a weak local MP and Mr Peters would not have re-emerged as either a prop for a National fourth term or a potential candidate for the prime ministership in a Labour-majority regime.

Also Labour may have pushed away their best chance of Government. Peters won Northland by vowing not to change the Government, just to hold them to account. He is now an MP in a very blue seat. If he holds the balance of power in 2017, is he going to put Labour and Greens into power? Less likely now he is MP for Northland.

Labour’s decision in Northland was a classic example of being a good tactical decision, but a bad strategic one.

Harre was on Greens campaign committee until a fortnight ago

June 3rd, 2014 at 4:00 pm by David Farrar

Stuff reports:

Meanwhile, Norman revealed that new Internet Party leader Laila Harre had wanted to be a Green Party MP before she quit her adviser role in Decembern. 

A spokesman confirmed she was also on the campaign committee until a fortnight ago.

If this was Game of Thrones, Harre would be a sellsword or a mercenary. How can you be on the national campaign committee for one party a fortnight ago, while negotiating to be leader of a competing party?

Also enjoyed this quote from Matthew Hooton on Q+A about how the Mana-Dotcom alliance will appeal to young non-voters:

This talk of the the youth vote is just awful when aging baby boomers think they’re going to connect with Gen Y through their kids … Harre is 48, Hone Harawaira is 59, John Minto is 61, Pam Corkey who is designing the comms strategy to appeal to youth is 58, Annette Sykes is 53 and Willie Jackson is 53.

It’s like a sex pistols reunion tour. It’s a bit of fun, but it risks being embarrassing for everyone.

It is looking like the Alliance reborn.


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.

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.

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 🙂



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!

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.

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.

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.

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.

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.

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.

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!

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.

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?