Labour on Auckland

Wednesday, September 16th, 2009 at 1:58 pm

Labour List MP Damien O’Connor blogs:

The rest of the country subsidises Auckland and provides it with the wealth to exist.

This is not a view unique to Damien. Michael Cullen once said:

Auckland now sits atop the nation like a great crushing weight

I think it is commendable Damien shares his views with us. he is obviously positioning to become Finance Minister.

Incidentally a report in 2006 concluded Auckland sends $3.8 billion more tax to Wellington than it receives back in spending.

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Thanks Michael

Wednesday, June 3rd, 2009 at 2:56 pm

Stuff reports:

The rail assets that cost taxpayers’ $690 million last year are now valued at just $349 million.

The Australians still refer to it as the sale of the century.

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Cullen’s speech in full

Monday, May 4th, 2009 at 10:54 am

The NZ Herald has a transcript of Dr Cullen’s valedictory speech, plus they stuck it on You Tube.

UPDATE: My NBR column on Friday looked at Dr Cullen’s record as a Finance Minister. I thought I was fairly harsh on him, but most of the commenters to date think I was too easy!

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More Cullen wit

Thursday, April 30th, 2009 at 5:57 am

Claire Trevett reports:

He stood to make his farewell speech to Parliament yesterday after nearly 28 years, observing very few people got the chance to deliver what is in effect their own eulogy “or at least a progress report thereon”. …

“[The 1980s economic reforms] certainly caused me some small financial pain. The biggest speeding fine I ever got was driving back from Whakatane to Wellington in January 1990 when I heard on the news that Geoffrey Palmer was supposedly moving to reinstate Roger Douglas as Minister of Finance. I hit 134kph.”

On the political gamesmanship of Parliament’s question time:
It is, in my view, by far the most effective test of the mettle of ministers and their opponents of any Westminster-style Parliament. Imagine, for example, how well George W. Bush would have survived question time on a daily basis if he had been our Prime Minister. It would have taken many Grecians bearing many sorts of gifts to get him through the experience.”

On the different outlooks of New Zealand and Australia:
“An Aussie believes a little ripper is something good. We are just as likely to fear it might be the son of Jack, let in by mistake by Immigration.”

Sigh. I will miss him. I didn’t like his economic policies (in fact I think they represent the missed opportunity of a lifetime- a decade of waste), but he was a great parliamentarian with a real love for the House and its institutions. Sometimes his wit (especially in their final term) would descend into bitterness or nastiness, but most of the time it was a joy to behold.

When I worked in Parliament, a lot of the staff would gather around a TV to watch question time. And obviously you are there to cheer your own side on. But Cullen was the only Labour MP who could consistently get the partisan Labour-hating (in a competitive sense) Nat staffers clapping and cheering as he skewered a National MP with a witty response.

There were times too, when said National staffers would yell abuse at Dr Cullen’s image on TV, when his tongue went from funny to malicious. The relationship was certainly a love/hate one. But for me, I will remember the good times.

Cullen is the last of the three MPs who could dominate Parliament like no others since Muldoon and Lange. The other two were Peters and Prebble.

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Cullen’s best quote

Wednesday, April 29th, 2009 at 9:50 pm

My favourite is:

“To those in government, a genuine thank you for the NZPost appointment. When I attacked National last year for swallowing so many dead rats little did I think that some might see me as one of them.”

Also good:

“The attorney-general does not have to be a lawyer any more than the minister of education has to be a teacher, the minister of health a doctor, or the minister of corrections a convict.”

And some advice for the Greens:

“To the Greens — good luck. But loosen up a bit; saving the planet needs to sound less like punishment for our sins if it is going to succeed.”

Will link to video and transcript when I can locate them.

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Dr Cullen’s Maiden Speech

Wednesday, April 29th, 2009 at 1:00 pm

A reader asked if a copy of Dr Cullen’s maiden speech could be located as it was not online. I put out a cry for help,and someone has found a copy, so enjoy:

New Zealand Parliamentary Debates 23 April 1982, vol. 443, p 441-446

23 April 1982 Address in Reply 441

Dr CULLEN (St. Kilda): I rise feeling like the elusive “scarlet pimpernel” of the Labour Party. Members opposite, or at least some of them, have worked themselves into a righteous lather of trembling indignation about the left-wing academics in the Labour Party. At last, the “one and only” has stood up to be counted. The previous Opposition maiden speakers are not academics by their immediate former profession. I am the first Opposition speaker to be so. Three Opposition members might be classed as academics, but I am not sure about their qualifications: the member for Christchurch Central is a lawyer, and therefore qualified to make an income outside—and that may be an automatic disqualification; and the member for Te Atatu and the member for Mt Albert taught at Auckland University, but as an Otago man I am not clear about their status as academics. When the compliments about left-wing academics are thrown across the House I shall be grateful if they are addressed to me personally and not spread around in an unwarranted fashion.

I affirm my loyalty to the Queen, and her heirs and successors, whoever they may be.

Mr East: And to your old school, Christ’s College.

Dr CULLEN: And to my old school, Christ’s College. I am proud of the fact that my secondary education was not paid for by the taxpayers of New Zealand but by the farmers of Canterbury and Hawke’s Bay. I ripped them off for 5 years then, and I shall get stuck into them again in the next few years, so the honourable member should not bring that subject up too often.

The rest is over the break.

(more…)

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Is he trying to be funny?

Wednesday, April 29th, 2009 at 10:36 am

NewstalkZB reports:

Mr Goff says the person who should be most grateful for the legacy left by Michael Cullen is the current Finance Minister Bill English.

Oh yes, Bill gets up every morning I am sure and says to Mary “Boy am I glad Michael Cullen left me a structural $10 billion a year deficit”.

He gets in to work and tells his staff “Think how boring our job would be if Dr Cullen had not increased spending by $4.5 billion a year in his last budget”.

At Cabinet every week Bill reminds his colleagues of how good a legacy Dr Cullen left them, as he screws them departmental budgets down.

Goff should do stand up comedy if he really said that with a straight face.

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Cullen valedictory

Tuesday, April 28th, 2009 at 7:46 am

Michael Cullen’s valedictory will be at around 5.30 pm Wednesday. His departure leaves Phil Goff as the sole survivor of the 1981 intake.

Love him or hate him, Cullen has been one of the funniest debaters in the House in recent years, and I hope he will not disappoint in his valedictory. If it is as dispassionate as Helen’s, I’ll slit my wrists.

One of his former press secretaries has a tribute to him in the Herald. It covers some of the complexities:

For many in the public, reconciling the man seen visibly angry in a controversially broadcast exchange with Guyon Espiner with the man visibly moved at the signing of the Central North Island forestry settlement is not an easy task.

How do you make sense of the formidable policy mind who amazed senior officials when he designed the expansion of KiwiSaver on a couple of sides of A5 (complete with costings) with the infuriated figure who labelled John Key a “rich prick”?

I’ve referred to Cullen as a flawed genius previously and will try and cover this in more detail later in the week.

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Cullen’s scorched earth policy has succeeded

Friday, April 24th, 2009 at 9:38 am

This week’s Dispatch from St Johnnysburg is online at NBR. Some extracts:

Bill English all but confirmed this week that the tax cuts planned (and legislated) for 2010 and 2011 will be cancelled.

They are a casualty of not just the global recession, but a victim of Michael Cullen’s “Scorched Earth” policy, otherwise known as his 2008 Budget.

Dr Cullen was gleeful in the hours after his final budget. He smirked and gloated that he had left no money for National. In fact he agreed in an interview with Gordon Campbell that his budget was a “booby trap” for National. …

You can reduce taxes if you keep spending under control, but Dr Cullen increased spending in his final budget by a massive $4.5 billion, at the same time as he also delivered (finally) tax cuts which when fully implemented would reduce revenue by around $3 to $4 billion a year.

Comments and feedback can be done over at NBR.

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Labour backs down on Foreshore & Seabed Law

Wednesday, April 22nd, 2009 at 5:46 am

It is good that Labour has said it was wrong to legislate to remove the ability of Iwi to seek title in court for parts of the Foreshore & Seabed. Access to the courts should not be removed at whim by a panicked Government.

It is bad that once again they try to rewrite history about why they did so. Here is what Dr Cullen says:

“Labour believed at the time of the Ngati Apa decision that it would have been unacceptable not to respond to the Court of Appeal ruling in a definitive way. The finding created widespread uncertainty that a responsible Government needed to address.

“We responded with the best solution possible at the time. But I have always regretted the fact that National and other parties refused to enter into proper discussions on this issue, so that a broad political consensus – as has been established with the Treaty settlement process – could be reached.

Labour made their key decision before there was any attempt to get consensus. Within just a few days of the Court of Appeal ruling, Clark and Wilson announced they would legislate to over-turn the decision.

“The matter must be resolved once and for all. Now that National claims to have disavowed its previous ‘Iwi vs Kiwi’ stance and a review has been established, the potential for that broad consensus to be reached appears possible.

Labour are trying to rewrite history to portray their decision to legislate to remove access to the courts, as being the result of National’s Iwi/Kiwi campaign.  Again – the truth is Labour made the key decision to legislate within a few days of the Court decision – which was around two years or more before the Iwi/Kiwi billboard.

The sensible and principled thing to do would have been to appeal the Court of Appeal decision to the Privy Council. Labour did not want to do that as they had announced they wished to abolish such appeals, so rather than follow the law, they unilaterally changed it.

Chris Finlayson has resisted the urge to score cheap points at Labour’s expense (a lesson they could learn) and is reported as saying:

Treaty Negotiations Minister Chris Finlayson last night welcomed Labour’s move.

“I agree completely with Dr Cullen’s sentiment that the review of the Foreshore and Seabed Act needs to be approached in a non-partisan way, and that the issue should not be used as a political football.

“I welcome his assurance that the Labour Party will engage constructively with the review. Our goal is to reach the best possible outcome for Maori and all the people of New Zealand, and it is important that the voices of all parties in Parliament are heard.”

Of course the details of what the review panel proposes will be crucial.

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Cullen did say it after all!

Tuesday, April 21st, 2009 at 5:06 pm

Since I blogged this morning that Dr Cullen may have said “We won, they lost, let’s do lunch” instead of “We won, you lot, eat that”I have been buried in texts and emails from journalists, former MPs, staffers all sure he had. But none of them knew exactly when – in fact some said it was during tax increase law, others re ACC, others some other time.

But finally we have an answer. We have a quote from Hansard on 9 August 2000 (a week before the let’s do lunch one I blogged earlier). It is:

“Eat that! You lost, we won, it [the ECA] goes! It is as simple as that!”

So there has been a minor mangling with the “Eat that” being at the beginning, not the end, but otherwise it is confirmed Dr Cullen did say that. My thanks to AG and all the others who have been at work on this.

Interestingly, one wonders then why Dr Cullen told the SST:

On “We won, you lost, eat that!” No, he says, he never said that to National. “It’s a wonderful piece of historic myth.”

Hardly a myth it seems. I don’t think a minor re-ordering which doesn’t affect the intent or arrogance qualifies Dr Cullen to call it a historic myth.

I’m glad someone finally dug up the actual quote. I was close to e-mailing Dr Cullen himself asking for what he thinks he said!

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We won, you lost, eat that

Tuesday, April 21st, 2009 at 12:00 pm

A reader has e-mailed me regarding the infamous Cullen quote of “We won, you lost, eat that” and it does appear that in fact the quote has got mangled over the years.

At the time Cullen announced his retirement, there was a lot of searching for the quote. I even had a couple of calls asking me if I could recall where and when. I said I was pretty sure it was during the Employment Relations Bill debate as I was pretty much in Parliament from 9 am to midnight every day for a week as the main analyst on that law. I think I wrote over 1,000 amendments!

Anyway I recall Cullen saying it after one of the mammoth fillybustering sessions came to an end. And it was indeed at that time, but not quite as legend now reports it. My reader has seen the original video footage:

it was the day of 16 August 2000. Parliament has just finished the 7th and final day of the Employment Relations Bill second debate. The Clerk has just announced there will be a debate for the 3rd reading of the ERB.

Speaker Hunt calls for a meal break as both sides stand after what must have been a long morning.

Cullen is heard on the camera mic as he stands saying in a loud voice to his front bench colleagues, “We won, they lost, let’s do lunch”.

It seems the original quote has been through Chinese whispers since then, and the “eat that” part is not accurate. The first media reports of it were some days later.

So as a farewell present to Dr Cullen, Kiwiblog is pleased to set the record straight!

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Cullen interview in SST

Sunday, April 12th, 2009 at 9:14 am

An interesting interview of Michael Cullen in the SST:

MICHAEL CULLEN didn’t mean to call John Key a rich prick. At least, not out loud. “That was an interjection I never meant to be heard by anybody, not even those around me,” says the former deputy prime minister. “It was under voice,” he explains, mouthing and whispering the infamous words again to show how it happened.

Just like when Steve Maharey said “fuck you” to Jonathan Coleman and Ruth Dyson referred to Katherine Rich as a stupid tart. Also there was no whispering when Cullen called Key a scumbag, so I think we should be careful of rewriting history.

But Cullen was angry that day in Parliament, for family reasons. National leader Key had brought Cullen’s wife Anne Collins into the debate the previous night.

I generally agree that MPs families should be left out of politics. But there is an exception to that rule – when the family members willingly get involved in politics themselves.

I’ve looked at Hansard of that day, and the reference is merely to Anne Collins having supported Russel Fairbrother’s nomination in 2002, and Cullen signing Stuart Nash’s nomination papers in 2008. If you are actively involved in a political party, supporting various candidates, then you are in politics and it is not the same as a spouse who has no political involvement at all.

The politician finds it depressing that “everyone made a federal case” out of his blurt. He’s the father of Kiwisaver, the Cullen superannuation fund, of Working for Families and a return to egalitarianism in the age of excess, and all the media want to talk about is the “rich prick”! Cullen sighs in his blank office.

It was the quote that kept on giving. And the reason it did, was the inclusion of “rich”. If he just called him a prick it would have been forgotten. But by calling him a “rich prick” it implied being rich was a bad, nasty thing – like being a prick.

The government was sensitive to the charge that it was Nannyish, he says, but the rage over the light-bulb ban seemed “highly irrational”. The new bulbs were more efficient, less expensive and more environmentally desirable. But it didn’t think it could reverse the ban either. “When you’re a government that’s been there a long time, you keep doing u-turns and people start seeing you again as weak.”

This is one of the key mistakes third term Governments make. National did it with Punket in 1999, and Labour with various things in its third term. You convince yourself that “winning” and “not giving in” is more important than killing off an issue.

The anti-smacking bill was another strange case: even though National ended up voting for it, Labour got all the flak. Cullen says Labour could not have avoided the issue posed by green Sue Bradford’s bill. Section 59 of the Crimes Act had led to the acquittal of people who had made quite serious attacks on children. And it fitted Labour policy, so opposing the measure would make people say it had no principles.

But it was not a binary choice between the old law and Bradford’s proposal. The Borrows amendment would have stopped those acquittals but not criminalised parents who apply a light smack for correctional purposes.

Cullen still insists he could not have afforded big tax cuts in 2005 when he offered only the “chewing gum” cuts. Treasury was still forecasting disappearing surpluses.

“It’s a brave minister of finance who tells Treasury, `You’re wrong, I think we can spend it’, and then Treasury will produce numbers which will show you moving into significant deficit… I’d have been shot.”

Bullshit. Because he did exactly that in 2008. Even before the credit crisis, the tax cuts he announced were on a far far worst set of books than in 2005. The irony is tax cuts in 2005 would have been sustainable, but his 2008 tax cuts probably will not be.

The National-led government cut 70 staff from the Tertiary Education Commission. “The chances are this will lead to another blowout in low-quality education spending [such as the notorious "twilight golf" courses], which will cost far more than the bureaucrats.

These twilight golf courses occured under the TEC Labour set up. They had hundreds of staff and did nothing about them. WHen there were just 25 staff in the Ministry of Education, they had far better quality control than the montrosity created by Labour. Does Cullen really think twlight golf courses occured because there were too few TEC staff?

Cullen believes “only a tiny group of highly entrepreneurial people will make their way out of any situation, because they’ve got this enormous gift and it’s a lucky gift they’ve got”.

So sucess is all due to “luck” and a “gift”. Hard work, perseverance, education, training have nothing to do with it?

“It doesn’t matter that much how rich people get, provided they’re prepared to pay their taxes. What I always hate is when I hear the rich complaining they have to pay their taxes, that that is so unfair. I’ve always said, `Gosh, I was so pleased when I was deputy prime minister earning enough money to pay so much tax’.”

Dr Cullen has never worked in the private sector. When your income is due to your activites actually generating wealth, you do get upset as almost half of it disappears to Dr Cullen. When you have been on a state salary for 35 years or so, then of course you don’t mind paying tax.

On the PM: “[John] Key is a natural high pragmatist or low pragmatist. He wants to be prime minister, he wants to do things but he’s quite pragmatic about methods. Bill English is much harder-line.” So how come Labour painted Key as a neo-con wolf in sheep’s clothing? “I’d prefer not to go into that.”

This is quite extraordinary. Cullen basically admits that Labour’s negative campaign against Key was false, and they knew it was false, but they hoped the mud would stick. What else did Labour campaign on, knowing it was false?

On “We won, you lost, eat that!” No, he says, he never said that to National. “It’s a wonderful piece of historic myth.”

I think it was directed to business actually. Hansard for back then is not online, so hard to tell.

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Looking on the bright side …

Wednesday, April 8th, 2009 at 8:22 am

Still fairly ropable about the decision re Cullen, but looking on the bright side I am amused that Dr Cullen will now be working for Jim Bolger, Tuku Morgan and John “Rich Prick” Key.

Slightly cheering me up also is the talk that quite a few in Labour are pissed off also, with his decision to take up a Government Board role. By departing before the Mt Albert by-election (his valedictory is 29 April), it will make the issues around candidate selection more transparent to the public as Damien O’Connor will be an MP before Mt Albert goes to vote.

I’ve also made lots of money on iPredict investing in the probability that Clark and Cullen would both be gone this year.

And with Clark and Cullen gone, we get a new Father of the House. Initially I thought this would be Phil Goff as he was elected in 1981 – the only Muldoon era MP left in Parliament now.

But he lost his seat in 1990, so his time only counts from 1993. Mr Speaker will in fact become the Father of the House when Clark and Cullen go. He came in in 1984. So did Mallard and King but they also spent 1990 – 1993 out of the House. And for those who like trivia, Jacinida Ardern is the “Baby of the House”.

UPDATE: Rodney reminds me that Sir Roger entered Parliament in 1969! Of course he had a small break from 1990 to 2008!

UPDATE2: Actually Jim Anderton and then Peter Dunne will become Father of the House. They also entered in 1984 and were swown in before Lockwood as it is done in alphabetical order. I only looked at the two main parties as the minor parties were all set up in the 1990s, but of course they both entered as Labour.

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Cullen press conference at 1 pm

Tuesday, April 7th, 2009 at 11:21 am

Michael Cullen is holding a press conference at 1 pm.

The expectation is that he will announce the date he is going to resign from Parliament.

Judith is getting closer and closer to returning!!

I’ll update with the details after 1 pm.

UPDATE: Transtasman have just said that Cullen is going to be appointed as Chairman of not one but two SOEs – NZ Post and Kiwibank.  I think that is a crappy crappy move from the Government and a slap in the face to its thousands of volunteers and supporters.  I fully appreciate Cullen’s skills, but appointing him to Chair an SOE while he is still an Opposition MP, and just weeks after you were talking about prosecuting him for Public Finance Act breaches sends out a confused message.  Any future appointments for Cullen should have been decided on their merits, and left until long after he has retired from Parliament. Not be part of some shabby backroom deal, as this appears to be.

UPDATE2: Transtasman has it a bit wrong, and not quite as bad as thought. Cullen is appointed to NZ Post only, and is expected to become only deputy chair in the medium term. No word on Kiwibank, but I guess that is appointed by NZ Post Board?]

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National to appoint Cullen as Reserve Bank Governor

Wednesday, April 1st, 2009 at 7:15 am

I understand that later today National will be announcing that they are appointing Michael Cullen as Governor of the Reserve Bank.

Their initial plans to make him Chairman of a major state-owned enterprise were criticised for his lack of commercial experience. Hence they have shifted course and now plan to make him Reserve Bank Governor as that is normally filled by people with more of an academic than commercial background.

Some MPs have told me they opposed the appointment, when it was notified to Caucus yesterday, but no formal vote was held. His appointment is part of the Key’s strategy to appear magnamious in victory and use talent from all parties.

The dissenting MPs are worried that here could be a minor loss of credibility for National to appoint to such an important role, the man whose financial and economic policies they have criticised for the last decade. But the clinching argument was that as National has adopted so many of them, they may as well adopt their architect also.

It will be interesting to see whether the dollar rises or falls, once the appointment is confirmed.

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Trans-Tasman on Cullen as SOE Chair

Thursday, March 12th, 2009 at 4:45 pm

Trans-Tasman has some good advice for the Government in discussing the ACC funding issue:

Which may be why the Nats have gone coy on making Michael Cullen the Chairman of Mighty River Power’s Board.

They also recall John Tamihere’s famous comment about Cullen’s ability to “cut a deal on a piece of legislation, he can change a single word in a piece of legislation without those other bastards [coalition partners] knowing about it, and it melts down everything they wanted.”

If it happens with coalition partners, imagine Cullen running an SOE under a National Govt.

That is a good reason, plus the angry horde of National Party members who would encircle the Beehive and try to burn it down if they appointed Cullen as an SOE Chair this year.

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Cullen to chair an SOE?

Saturday, March 7th, 2009 at 10:04 am

The Dom Post reports:

Michael Cullen is being tipped for a six-figure salary as chairman of one of the country’s top state-owned enterprises.

Top of the likely list is power generator Mighty River Power, Government sources say.

I have real problems with this.

I do not think it is credible you can go directly from attacking the Government in Parliament to working for them, chairing a major SOE, with say only a day or two in between.

Yes Jim Bolger chaired SOEs under Labour – but he was appointed around four years after he left Parliament. That makes a huge difference.

Supporting Helen for the UN job is different also – that is an international role – not a role that is serving the NZ Govt and at the total discretion of Cabinet.

I am not arguing that Cullen is not talented, and at the appropriate point in time, would be a good appointee to certain boards. But he should be out of consideration until National’s second term (if there is one), or at least for a minimum of a year after he leaves Parliament.

How can the Government think it is serious when it complains abut breaches of the Public Finance Act, massive blowouts in the Crown Accounts, the disaster of a purchase that was KiwiRail, and then people read oh yeah we are looking to reward the guy who did all this – before he even has even resigned from Parliament?

Most people in National were very relaxed about supporting Clark for a UN post. They are very much the opposite when it comes to having Cullen chair a major SOE.  I’ve already had absolutely furious phone calls this morning from very senior and long standing party members. I think some members would resign if an appointment was made during 2009.

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Cullen to swap sides

Friday, February 27th, 2009 at 9:00 am

Michael Cullen is set to swap sides. No, not from Labour to National, but from representing the Crown in Treaty negotiations to representing Tuwharetoa in Treaty negotiations.

This is almost the opposite to National’s Chris Finlayson. Chris used to be Ngai Tahu’s lawyer, and now of course is the current Treaty Negotiations Minister.

It is possible Cullen could end up negotiating with Finlayson on behalf of Tuwharetoa. For their sake I hope Chris has forgiven Cullen for personally vetoeing Chris getting the QC in 2005!

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Vernon Small says Cullen to quit soon

Wednesday, February 25th, 2009 at 8:53 am

Vernon Small seems to have an exclusive at Stuff:

Former finance minister Michael Cullen is expected to quit politics in the next two months. …

But party sources said Dr Cullen’s departure was imminent, and would certainly be before the May 28 Budget.

Former Tasman-West Coast MP Damien O’Connor is next on Labour’s list and would be first in line to take Dr Cullen’s seat.

Miss Clark’s resignation would trigger a by-election in Mt Albert. List MP Phil Twyford is seen as the front-runner to be Labour’s candidate. Next in line to replace him would be former Auckland Central MP Judith Tizard.

Everyone assumes Damien will accept the list spot. I certainly think he will. I do wonder if anyone has actually asked him?

There may be one small complication for Damien. The Taito Philip Field trial is in April I think. Now I don’t know if Damien will be a witness, but it is possible. And there could be some embarrassing stuff come out on two fronts. The first is why Damien approved such a massively high proportion of requests from Field. The second is his insistence he was not warned about what Field was doing, despite numerous warnings sent to his office.So Labour may want to delay Cullen going until after the trial.

Judith Tizard returning, would be of course wonderful. Every party in Parliament has edged away from her daft s92A law. But wonderfully Judith was on radio yesterday giving it her full support.

At some stage I’ll write the “eulogy” for Michael Cullen – probably when he does announce his resignation. The term “flawed genius” is what most comes to mind as the theme.

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How bad is Labour’s legacy

Thursday, December 18th, 2008 at 12:21 pm

We found out today how bad is Labour’s economic legacy. In 1999 National left Labour with a strongly growing economy, falling unemployment, low interest rates, and low inflation.

Today’s DEFU tells us what Labour has left National. And my God it is bad:

  • Unemployment to hit 6.4% (and maybe 7.2%) within 15 months
  • Gross debt to increase from under 20% to a massive 33.1% (and maybe 38.6%) by 2013
  • OBEGAL deficits of $23 billion over next four years
  • Cash deficits of $48 billion over five years

This is appalling.  Even the “upside” scenario sees a massive increase id debt, deficits and unemployment.

Deficits of up to $6 billion are just unacceptable. If we do not improve from the lgeacy Labour left us, we will be leaving the next generation with a mountain of extra debt.

It gets even worse over the ten year horizon:

  • The costs of all the borrowing basically fuck the economy. We end up with a permament structural deficit with the books Labour have left us.
  • Even after 2019, the crown will be running an permanent OBEGAL deficit of 2% of GDP, or $4 billion a year. Even the “upside” scenario sees an ongoing deficit of 0.7% of GDP. So Labour have left us with an economy that is stuffed, even under the more optimistic scenario. We just can not run a decade of deficits.
  • Gross debt is now projected to hit 57% of GDP in 2023. Do you remember Helen and Michael telling us that hitting 22% of GDP would be reckless. Well they have left us with a debt on track to hit 57% of GDP!!!
  • Even net debt, which had reached zero, is projected to rocket up to 47% of GDP

This is a set of books, every bit as bad as those left behind by Labour in 1990. They are horrible. Bill English has the toughest job in NZ for the next few years.

The task for the National-led Government is to improve on this. DEFU is basically what would happen if you continue with Labour’s policy settings. The tax cuts were fiscally neutral so don’t affect things. Over the next few years we should always refer back to this DEFU as what we would achieve under Labour. National has to deliver smaller deficits and less debt than DEFU is projecting. That is their challenge.

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Following Cullen’s lead

Thursday, December 11th, 2008 at 11:31 am

I blogged this morning my concern that bills under urgency were not being made available to MPs at the first available opportunity, and that the rules should be changed, if they were preventing this.

It does seem perverse that the House votes urgency on bills before they are tabled, but Graeme Edgeler at Public Address supplies this transcript from Hansard:

Appropriation (Parliamentary Expenditure Validation) Bill
First Reading

Hon Dr MICHAEL CULLEN (Minister of Finance): I move, That the Appropriation (Parliamentary Expenditure Validation) Bill be now read a first time.

Dr Richard Worth: I raise a point of order, Madam Speaker. Would it not be appropriate for us to see this bill?

Madam SPEAKER: That is not a point of order. [Interruption] The bill is on the Table.

Hon Dr MICHAEL CULLEN: Speaking to the point of order, I say that a copy of this bill was made available to National Party members this morning before their caucus.

Gerry Brownlee: The bill was delivered to us halfway through our caucus this morning. One copy was given to me, and another copy was given to Dr Brash. There are only two copies on this side of the Table, and they were brought into the House just as Dr Cullen was about to speak. This debate should not progress until there are sufficient copies on the Table for every member to have an opportunity to read it.

Madam SPEAKER: I understand that copies of the bill are available for members on the Table.

Gerry Brownlee: I seek leave for the House to adjourn for 20 minutes while the bill is distributed.

Madam SPEAKER: Leave is sought. Is there any objection? Yes, there is. [Interruption] Members, please, we will preserve a little bit of respect and decorum.

Hon Dr MICHAEL CULLEN: Of course, when bills are moved for introduction and passing under urgency, they are tabled subsequent to the motion being approved.

So rather rich for Dr Cullen to be complaining, when he himself cited the procedure he is now complaining about.

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Setting up Parliament

Tuesday, December 9th, 2008 at 12:26 pm

The order paper reveals some useful things:

  • Lindsay Tisch is to be Deputy Speaker
  • Assistant Speakers will be Eric Roy and Rick Barker. A pity Ross Robertson is not carrying on, as he was good in that role.

The full list of Select Committee memberships has not yet been revealed, but they do propose the Committee to review the ETS, and it is:

  • National – Craig Foss, Nicky Wagner, Paul Hitchison, Hekia Parata (4)
  • Labour – David Parker, Moana Mackey, Charles Chauvel (3)
  • ACT – Rodney Hide (1)
  • Greens – Jeanette Fitzsimons (1)
  • United Future – Peter Dunne (1)
  • Maori Party – yet to be named (1)

It will be nice to hope there will be a some broad agreements on the best way forward, but I do note that National has a majority with any two of its three support partners.

The proposed terms of reference for the committee do not include an explicit review of the science, however as they look at issues such as mitigation vs adaptation, demerits of the science will no doubt be considered as the robustness of the scientific scenarios will influence decision making.

The House is underway now. Michael Cullen tripped Gerry Brownlee up on some procedural issue. While I am sure Labour liked tripping Gerry up, I have to say the absolutely patronising and condescending tone from Cullen was him at his worst, and would probably knock Labour down 5% in the polls if more people saw it. Cullen can be the funniest wittiest MP in the House, but he can also be the most offputting.

In response Gerry made the point that he did stuff up, but he can admit his mistakes, and the reason Labour is now on the Opposition benches is because they never could admit their mistakes. So true.

The House is adjourned until 2 pm when the address in reply will start.

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Who will be Speaker?

Saturday, November 15th, 2008 at 11:27 am

The Herald reports four contenders for Speaker. They are:

  1. Lockwood Smith
  2. John Carter
  3. Eric Roy
  4. Richard Worth

They each have their own claims for the job. Lockwood is National’s longest serving MP. John Carter has been a Whip for many years, knowing Standing Orders well. Eric Roy was a very popular Assistant Speaker and Richard Worth would being a first class legal talent to the role.

This may dismay some, but I think Michael Cullen would also be a damn good Speaker. But I think his latest game playing over Treasury accounts has killed off any chance that he could be seen to make the transition from partisan player to referee.

As for the four candidates, it will presumably go to a National Caucus decision and then the preferred candidate checked with coalition partners.

But wouldn’t it be nice if it was left to the House as a whole to decide? If all parties would agree not to apply the whip and allow a free vote, then they could have a preferential ballot as allowed for in Standing Order 19. It would be fascinating to see all MPs vote from their seats.

I presume two of the unsucessful candidates will probably become Assistant Speakers and that Labour’s Ross Robertson will be Deputy Speaker.

UPDATE: Mallard is against Lockwood being Speaker. That probably helps Lockwood immensely.

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Cullen does not get it

Friday, November 14th, 2008 at 10:36 am

Michael Cullen is missing the point about his release of the Treasury update:

But Dr Cullen last night defended his action, saying he released the paper because Prime Minister-designate John Key, after his briefing from Treasury, was “pretending everything is all right with the world”.

It doesn’t matter what Cullen thinks is the justification. His job is to do what the incoming Government wants until they are sworn in. He was there in 1984 and should know better.

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