Housing demand and supply side measures

July 13th, 2016 at 12:03 pm by David Farrar

The media constantly report that the Government has only had policies dealing with the supply side of housing, and not the demand side. This is not true. Off memory, here are policies that National has implemented, or the Reserve Bank has.

Demand Side

  1. Removed the ability to claim depreciation on houses as a tax expense
  2. Middle and low income earners get grants of up to $20,000 for their first home
  3. Any non-primary house sold within two years of purchase to be taxed as income on the gain
  4. Non-resident buyers required to register with IRD, so level of foreign purchases can be monitored
  5. $5,000 grants for people on social housing waiting list to move out of Auckland
  6. LVR rules requiring 20% deposits nationally and 30% deposits in Auckland
  7. DTI rules setting a maximum debt to income for borrowing likely in near future

Supply Side

  1. 210 Special Housing Areas agreed with Councils to consent 70,000 new houses
  2. Made crown land available for 10,000 homes, of which 40% will be “affordable”
  3. $1 billion fund available for Councils for infrastructure to new housing areas
  4. Require Councils to free up land in line with population growth
  5. National Policy Statement on Housing to give developers ability to take Councils to court if land not made available
  6. RMA changes to reduce consenting costs
  7. 4,000 more state houses being built
  8. Income related rent subsidies expanded to community housing providers
  9. $41 million funding for emergency housing providers to provide 3,000 beds
  10. Reviewing tenancies of state house tenants who no longer need a state house, so more needy families can get one
  11. Build 150 pop up houses in Auckland
  12. Central and local Government partnerships in areas such as Tamaki and Hobsonville to do major housing developments

Now there are other factors at work, which the Government has little influence over. Three major ones are:

  • Land restrictions put in place by Councils, especially Auckland Council. Only the Auckland Council can change these, unless Parliament over-rides them.
  • The level of net migration. The level of residency visas has remained constant, but we have more Kiwis remaining and returning, plus more temporary visas (students and work).
  • The low level for interest rates

This is not to say the Government can’t do more. Like Labour it should explicitly call for the Auckland Council to abolish the urban boundary. The idea of infrastructure bonds for new developments is worthwhile, and an urban development authority is also a good idea. But the power of compulsory land acquisition is a step too far.

Tisch to retire

June 21st, 2016 at 12:00 pm by David Farrar

The Herald reports:

Long-serving Waikato MP Lindsay Tisch will leave Parliament after next year’s election.

Mr Tisch, a former National Party president and who became an MP in 1999, has announced he will not seek the National Party nomination for his Waikato electorate next year.

Waikato is a safe National seat, with Mr Tisch having one of the largest majorities in the country when he won the seat by 16,169 votes in 2014.

18 years is a decent period of time to be in Parliament.

It is a very safe seat. I expect a number of very credible people will be interesting in being candidates.

Promises, promises, promises

May 17th, 2016 at 9:00 am by David Farrar

The Herald reports:

Prime Minister John Key has signalled National will campaign in 2017 on a $3 billion package of tax cuts.

Last week Finance Minister Bill English ruled out offering tax cuts in this year’s Budget and said it was not currently in the plan for the 2017 Budget either, although that could alter.

Speaking to Mike Hosking on Newstalk ZB this morning, Mr Key said tax cuts had been ruled out in the short term because it was a choice of spending $1 billion on tax cuts “to deliver very small amounts” or spending that money on healthcare and other areas.

Or you could cut spending in other areas and deliver more significant tax cuts.

However, he signalled National was working on a more substantial package of cuts for 2017. “We are not ruling that out for 2017 or campaigning on it for a fourth term in 2017, but having a bigger one, to be blunt, than $1 billion.” Asked how much was needed to deliver meaningful tax cuts, he said: “$3 billion, I reckon.”

While there was not enough in the Government books for that at present, he expected that to change as the surplus built up.

I’m sorry but unless the tax cuts are in next year’s Budget, why should we believe we’ll get them? We’ve been teased with the possibility of tax cuts for the last term, and if they’re not going to deliver them in next year’s Budget, then why should people believe they’ll get them in a fourth term?

He said it was possible to put that to the voters without it being dismissed as pork barrel, saying at some point tax thresholds had to change to take account of increasing wages.

“The average income is going up and we think in a few years time the average income will be $68,000. Well, the top rate cuts in at $70,000. If you don’t adjust thresholds over time you get to a point where the average income earner is paying the top threshold.

That can’t be right.”

No, it isn’t. So do something about it now.

Government cancels tax cuts

May 13th, 2016 at 1:00 pm by David Farrar

Stuff reports:

Finance Minister Bill English has outlined a Budget plan that promises cake today but gruel tomorrow – and marries the justifiable with the downright perverse.

The justified part is his decision to spend more this year and put on ice plans for a 2017 tax cut.

Population growth, especially from migration, is putting real pressure particularly on health and education that the existing $1 billion allowance for new spending simply cannot meet. A significant hike can be expected to both when Bill English stands to deliver his eighth Budget on May 26.

The Government’s “investment approach” to social issues, that favours a dollar spent now to save two dollars later, will also demand extra resources.

That will be funded by dismembering his 2017 election year war chest of $2.5b – of which $1.5b was earmarked for tax cuts.

They are now off the agenda, pending a significant improvement in the economic and fiscal situation, though English insists they are still a priority.

I think this is pretty appalling. If the Government can’t deliver any tax relief in next year’s Budget, then I don’t think they ever will. Due to fiscal drag, most New Zealanders end up every year paying a slightly higher proportion of their income in tax than the year before. I want a Government that slows or reduces the proportion of income people pay in tax – not one that allows it to keep increasing.

The Government has done a good job keeping spending under control, and the exceptional circumstances of the Global Financial Crisis and the Canterbury Earthquakes have meant that tax cuts prior to now were fiscally difficult. But patience will run out, if there are no tax cuts announced in 2017.

Nats eyeing up Northland

April 16th, 2016 at 2:19 pm by David Farrar

The Herald reports:

National is preparing to try to wrestle the Northland seat back from New Zealand First leader Winston Peters and at least five potential candidates are already in line to take on the challenge.

National lost the seat to Mr Peters in a byelection last year after the resignation of MP Mike Sabin.

The date for selecting the 2017 candidate is yet to be decided, but electorate chairwoman Rose May said Northland would be among the first on National’s list.

Ms May said it would be a challenge to unseat Mr Peters, but emphasised the need for the right candidate to be selected.

“We need to have somebody who is well known in their own right and has that x-factor. If we can find that person, we will have no problem winning the seat back, but if we don’t, then it’s going to be a struggle.”

Mr Peters was “the perfect politician”, Ms May said. “He’s so well known, he’s so well liked. He doesn’t actually do anything.”

Oh he does put out press releases.

Five people are understood to be interested, including Mark Osborne, who was soundly defeated by Mr Peters last year.

Mr Osborne confirmed he was considering a second tilt, but had not made a final decision. He was “not at all” put off by his bruising first encounter with Mr Peters: “It’s not going to be an easy challenge by any stretch of the imagination.”

Others understood to be keen include Kerikeri doctor Chris Reid, former police officers Matt King and Darren Edwards, who now works for the Far North District Council, and businessman Ken Rintoul.

Dr Reid moved to Northland from Britain about 10 years ago after serving as a GP and a decade in the Royal Marines, including time with the Royal Navy’s special forces. A keen photographer, he published a book last year of photos of his patients.

I just hope the voters of Northland ask themselves in 2017, what has Winston actually done for us!

No tax cuts for the Budget

April 14th, 2016 at 1:00 pm by David Farrar

The Herald reports:

Next month’s Budget will not contain plans for tax cuts, Prime Minister John Key said today.

“There will be no personal tax reform in the Budget,” Mr Key told reporters in Wellington afterwards.

Asked if that included tax cuts, he said, yes.

Why not?

Now the books are back in surplus. hard working Kiwis should get to keep more of their income. Through bracket creep, most Kiwis are paying more in tax now than previously.

Once the books are in surplus, the Government should allocate the surplus to both increased spending and tax cuts. It shouldn’t be one or the other but both.

It’s very disappointing that we’ve had to wait so long for tax cuts.

Rob Hosking sums up the week

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

Rob Hosking writes in NBR:

What a week.

The Greens embraced the Treasury.

National embraced public transport in Auckland.

And Labour embraced Jane Kelsey.

A great summary.

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

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

Jane also opposed every FTA Labour negotiated.

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

Not for the first time.

Hide predicts National-Green Government

December 30th, 2015 at 10:00 am by David Farrar

Rodney Hide writes:

My end of year prediction looks even further out. Our next government will be a National-Green one with Peters sidelined and furious.

Under Shaw’s leadership, the Greens are quietly repositioning. They joined National in hailing the climate change agreement concluded in Paris.

In that one moment they were no longer outsiders throwing rocks at those inside. They were responsible, stately and showing an ability to compromise and work with others.

It makes sense. The Greens need leverage to achieve policy. They have none if their only option is Labour. They need to sidle quietly up to National. And they are.

Key for a fourth term will pay their price. It will be for a comprehensive tax on greenhouse gas emissions, including agriculture. National in its cunning will make sure the tax takes more than three years to implement.

The election of Shaw will prove a tipping point but one we never noticed. Dunne will remain in office like the cabinet table and chairs. And Peters will be the angry man in opposition.

Plus ca change, plus c’est la meme chose.

I really can’t see Metiria Turei as a Minister in a National-led Government. However that would be preferable to Winston in Government!

National got it wrong

December 12th, 2015 at 12:00 pm by David Farrar

Stuff reports:

Health Minister Jonathan Coleman has conceded the Government was wrong to override Pharmac and fund breast cancer drug Herceptin in 2008, as it comes under continued pressure to step in over “game-changing” melanoma drug Keytruda.

Keytruda is the brand name for Pembrolizumab, a biologic drug for terminal melanoma patients that has produced promising results in early clinical trials.

But Pharmac has described Keytruda as a low priority option for funding, saying there is inconclusive data on its effectiveness.

Health Minister Jonathan Coleman has declined to intervene over Keytruda, despite the incoming National Government making a similar decision with Herceptin when it came to power in 2008.

Asked by TV3’s Paul Henry whether overriding Pharmac on Herceptin was “the right thing to do”, Coleman said: “I don’t think it was actually, and I think history has shown that.

“The research shows that nine weeks which were funded previously is actually just as good as 52 weeks, but I think lessons have been learned.”

So it was a fairly expensive bribe which possibly didn’t even improve health outcomes. Hopefully the lesson has been learnt.

Bryce Edwards on National’s third term

September 7th, 2015 at 7:00 am by David Farrar

Bryce Edwards looks at the first year of National’s third term, both the good and bad. Starting with the bad:

A long list of negative episodes have plagued John Key’s third term. Ranging from very damaging to trivial, these sagas have far outnumbered the few achievements of the Government since re-election.

National went into the election with little policy, but even what it did have has fallen by the wayside. Progress on other core right-wing policy issues has been woeful.

What’s more, the Government has struggled in key areas, such as formulating a popular climate-change response, convincing the public about sending troops to Iraq again, dealing with state surveillance and now the global economic problems.

The unfavourable ratio of damaging episodes to achievements strongly suggests National is now suffering from third-term blues, or “third-termitis”. This affliction is normally taken to mean that a government has become stale, arrogant and prone to errors.

The Government’s critics rightly ask where the fresh ideas are, or whether the Government has any vision left. …

Increasingly there is an acknowledgement of National’s “succession problem”. Key remains popular, but the lack of replacement options indicates another weakness.

Bill English is in the twilight of his career, Steven Joyce is technocratic and uncharismatic, Paula Bennett is seen as a lightweight and junior ministers are too inexperienced.

As is often the case with long-term governments dominated by a single figure, no new talent can prosper. It’s only once back in opposition that the party can truly see who is capable of rising to the top.

But he then looks at the other side:

A glance at any opinion poll indicates National’s extraordinary popularity. For example, the latest Herald-Digipoll puts National on 51 per cent support, and Key on 64 per cent.

Not only has the Government not dropped in support since its re-election, it is just as popular as when it first romped to power in 2008. In fact, the public’s so-called honeymoon with Key – which began in late 2006 – has lasted an astonishing nine years. Clearly, Key has the potential to go down in history as New Zealand’s most successful prime minister. …

Key has made his mantra “it’s the issues that matter” which determine how New Zealanders vote. Since the Global Financial Crisis, voters have been focused on economic-related issues and the traditional concerns of education and health.

Therefore, as at last year’s election, the central role of the economy is the main factor in National’s success. National continues to be perceived as a cautious and competent manager in difficult and uncertain times. This year’s Budget simply reinforced that image.

National’s pragmatic and clever manoeuvring is also a big factor in its success. The party has been careful not to stray too far from the views of middle New Zealand. Part of this is simply down to the dominance of pragmatists in Cabinet and caucus.

Key’s most influential supporters – English, Joyce, McCully and Bennett – are hardly neoliberal ideologues.

This doesn’t mean National hasn’t veered down the path of radicalism occasionally – most prominently in state-housing sell-offs and the social investment bond exercise. But such initiatives have been exceptions.

And Key’s instincts are to pull back from the extremes. When Labour has started to get traction on an issue, National has found ways to deftly shift positions. This normally involves adopting moderate policies, often adapted or stolen from opposition parties.

On key issues such as inequality and child poverty, National has sought to assuage worries with increases in benefit rates. Similar moves have been made to deal with growing concerns about capital gains taxes, foreign house buyers, and poor-quality rental properties. Much of this might be tinkering but it sends a strong message that the Government has listened.

The public don’t have to agree with every solution the Government comes up with, but they do want the Government to be listening and doing something.

A third reason National has been able to withstand scandal and embarrassment is it has already accumulated substantial political capital. Key has previously impressed the public with his Government’s management of serious problems – most notably the GFC, the Christchurch earthquake and the Pike River disaster. Competent political management in these areas has produced a reservoir of goodwill.

National therefore has the benefit of the doubt. The public has been ready to forgive or ignore any missteps. Even the ponytail embarrassment, which was viewed negatively by National supporters, could be forgiven. When a politician is largely trusted, as Key is, his failings will be discounted by voters.

In contrast with the Clark Government’s third-term, when Labour tended to dig its heels in rather than apologise or reverse from an unpopular direction, Key is more ready to U-turn or admit mistakes.

In general, Key appears to be aware of the need to combat third-termitis. His attempt to rejuvenate the party while in power has been unequalled.

Today’s Cabinet of 20 contains only 11 ministers who have been there since the start. Even more starkly, five of the six ministers outside Cabinet are new. And the wider caucus has been refreshed. More than a quarter of the caucus are new MPs elected last year.

The rejuvenation of Cabinet and caucus has been a real success story, but you can’t rest on your laurels. Rejuvenation needs to be constant.

Bryce then looks at the overall situation:

Ambition will be a powerful driver in keeping the Government on the popular path. Obtaining a fourth term is the Holy Grail for National and it’s within its grasp – the iPredict website of political betting, lists National’s chances as being 62 per cent.
Such an achievement would push Key ahead of Keith Holyoake’s record of 12 years as Prime Minister, making him the longest-serving PM since Richard Seddon, who served from 1893 to 1906.

And after that, a fifth term is distinctly possible. That would have Key even beating Seddon’s 13 years at the top, making him New Zealand’s longest-serving PM.

Generally the chances of a Government getting a 4th term should be around 20% at best. To be at 62% probability of a fourth term says something about both the Government and the Opposition.

Labour on National and vice versa

August 25th, 2015 at 1:00 pm by David Farrar

Richard Harman at Politik wrote:

Sometimes it’s worthwhile listening to what the Government and Opposition have got to say about each other in private. And each has a very different view of the other at present. But there is a degree of validity ion each narrative. National think Labour is hopelessly divided and that Andrew Little has yet to stamp his authority on the Labour caucus. They also think the party’s front bench is not performing particularly well.

Labour on the other hand think that the Prime Minister looks tired and that the “body language” of him and Bill English suggests they have run out of ideas.

The Labour front bench is Little, King, Roberston, Mahuta, Twyford, Hipkins, Clark, Ardern and Davis.

It’s hard to read Labour’s caucus.

Obviously the “globalists” — MPs like Phil Goff, David Shearer and David Parker would like to be able to agree to the TPP. But Andrew Little and Grant Robertson have not been sending the same signals. The danger for Mr Little is that he ends up in the same position as Labour Leader Walter Nash did after the 1951 waterfront dispute which he said he was “neither for nor against”. National hounded him for years over that statement.

Sounds like their new position on the flag!

Meanwhile the Government does seem to have gone off the boil. Their response to the drop in milk prices at this stage is to say that things are not as bad as the critics suggest. But it’s early days. And there are plenty of doomsayers on the Opposition benches. NZ First MPs (for example) claim that they have “inside” information which says the milk price will drop another 50 cents a kilo. So what this all adds up to is that we are in the early stages of what will become a political debate focused intently on the economy. It will require a gear change from National as it leaves the rock star economy behind and it will require more engagement (and some policy) from Labour.

I’d love to see policy from all parties about what they’ll do to foster economic growth.

Life after Key

August 22nd, 2015 at 4:00 pm by David Farrar

Stuff reports:

Is Paula Bennett the real deal? Given the polls, fretting about John Key’s succession plan might seem overly anxious. But third terms are the time when people start wondering openly about what comes after defeat slaps a once popular leader in the face. And Bennett’s name increasingly crops up as the woman who might step into Key’s shoes when that day comes.

Certainly, business leaders think she might be the real deal  –  Bennett topped the list of mentions in a mood of the boardroom survey by the New Zealand Herald canvassing Key’s likely successor.

That is no coincidence. Some of those surveyed worried about Key’s lack of succession planning. But they clearly haven’t been watching closely enough.

When Key announced his new lineup after the election Bennett was elevated to a cluster of portfolios that thrust her directly into the engine room of the Government’s reform programme both in social housing, and infrastructure. An associate finance role also puts her in an understudy role to Finance Minister Bill English and gives her CV the extra gloss of fiscal credibility. Short of bellowing “Paula for prime minister” through a megaphone, Key probably couldn’t do much more to announce the fact that he has anointed Bennett as his successor.

I’d also take note of the fact he has promoted Amy Adams, Simon Bridges and Jonathan Coleman to the front bench. They’re all seen as having the potential to take up senior leadership roles.

Clark’s big mistake was his her third term cabinet looks very much like her first term cabinet – especially the front bench.

While the top four in National remain basically unchanged, most of the Cabinet is new blood. The years each entered is:

  • 1990s or earlier – 5
  • 2002 – 2005: 4
  • 2008: 10
  • 2011: 1

So over half the Cabinet were not even MPs until 2008. Key has always focused on renewal – both in Cabinet and caucus.

Inside Story on National and Disadvantage

June 5th, 2015 at 9:00 am by David Farrar

Inside Story is a publication of the Swinburne Institute for Social Research in the School of Arts, Social Sciences and Humanities at Swinburne University of Technology.

They look at what is happening in NZ:

Imagine a country in which a government of the centre-right decided to make it a top priority to tackle inherited disadvantage. Where much of its limited new spending is devoted to “social investment” to reduce deprivation and increase workforce participation. And where it’s chalking up impressive results.

You don’t have to go far to find it – just across the Tasman. Taking on disadvantage is rarely a priority for conservative governments, but it has become an increasingly important theme of the second and third terms of the National Party government under prime minister John Key.

They look at the motivations of Key and English:

John Key himself grew up on welfare, in public housing in Christchurch with his sisters and widowed mother Ruth, a Jewish refugee from Austria. While he rose to become head of global foreign exchange trading for Merrill Lynch before entering politics, he has never forgotten where he came from. In his first speech as National Party leader, in 2006, he declared, “You can measure a society by how it looks after its most vulnerable… It is in the interests of no one, and to the shame of us all, that an underclass has been allowed to develop in New Zealand.”

Bill English, whom close observers see as the main generator of the government’s ideas, came to politics as a young conservative Catholic who had been a Treasury economist, then a farmer in the remote Southland. He has grown into a formidable independent thinker, committed to balanced budgets, small government, rebuilding earthquake-damaged Christchurch, and increasing business opportunities – but also to creating a society that intervenes to help its most vulnerable back into the mainstream.


And then they focus on the investment approach:

Key, English and other ministers have combined humanitarian instincts with actuarial logic to create a world-leading experiment: investing heavily to reduce the risk of children inheriting their parents’ welfare dependency, and to offer incentives and intensive help for the parents themselves to get off welfare and into work, and then stay in work.

What is most remarkable is that Key and English have made this “social investment” a top priority, in part, as a business decision to reduce the long-term cost of government.

Spending more money now, so we have to spend less later. All too often a Government won’t look beyond an electoral cycle.

English described it to Inside Story as “using an insurance approach to crack welfare dependency… A lot of government spending is trained on a relatively small part of the population whose lives are…” he paused, “complex for them, and expensive for us.” Targeted interventions aimed at lifting them out of dependency and into productive working lives not only improve their lives, he said, but also dramatically reduce government spending in the long term. “What works for the community works for the government’s books.”

It is working in welfare – the challenge is now to expand it.

The hardship package was focused particularly on “children at risk”: those kids whose parents are long-term welfare dependents and have family problems and criminal records. At the budget launch, English said actuarial assessments based on longitudinal studies have found that among children growing up in such families:

• 75 per cent will not complete school;
• 40 per cent will themselves become long-term welfare dependents by the time they’re twenty-one; and
• 24 per cent will have been jailed by the time they’re thirty-five.

Children growing up in this group, English said, cost taxpayers an average of NZ$320,000 by the time they turn thirty-five; some cost taxpayers more than NZ$1 million. These are stunning figures, which he uses to persuade fellow conservatives that it is in society’s interests to give these children and their parents a priority on spending that they have never had before.

So many of these families have second or third generation dependency and offending issues. It is about breaking the cycle.

So what was Labour’s response on the $30,000 door?

June 4th, 2015 at 7:00 am by David Farrar

Been sent these e-mails:

From: Group Manager Precinct Services
Sent: Friday, 23 January 2015 3:49 p.m.
To: Tim Macindoe; Chris Hipkins
Subject: Parliament House level 2 – proposed separation door

Hello Tim and Chris,

As you are aware PH level 2 accommodates members from both parties.  When the accommodation allocation was done last September there was talk of installing a corridor door to physically separate the parties, please see the attached floor plan with the small yellow highlighted area indicating the proposed door location.  This door has not been installed – my question to you is “do we need to install it?”

For all the right reasons we are all used to getting up from our desk during the day, leave papers lying around, not always consciously locking our computer, and not often locking the office door.  That’s a great way to be able to work.  The situation I want to avoid is something going missing and the bone being pointed at the other party sharing the floor when it could be anyone at fault, or a genuine mistake.

If we install the door the card readers on either side will prevent the other party from accessing through the door.  ‘Neutral’ people like security officers and Parliamentary Service staff will be able to get through both ways.  The kitchen adjacent to the door will become Nationals (as I understand a gentleman’s agreement has it today); Labour will have access to the kitchen (room 2-012) accessed from the corridor by the spouses room (2-009).  There are stair wells that provide access to either space so members from one party could access the others space via a stairwell.  Installing the door isn’t a complete solution, but it does put a separation point in place for those who’s offices are on level 2.

Could you please consider the merits and pitfalls of installing this door.  I don’t need an immediate answer so if you would like to consult with your members I am happy to wait.  If you want to continue to trial it without the door but reserve the right to ask for it to be installed at some future date that’s fine with me too, I’ll keep the funding in my capital forecast.

I’d like us to agree on what we decided to do (or not do) so we all avoid a tension point in the coming months or years.  Thank you very much.


Group Manager Precinct Services

And the e-mail between National MPs:

From: Tim Macindoe
Sent: Thursday, 29 January 2015 2:09 p.m.
To: Seven National MPs
cc: Nine National staffers

Subject: Your views re: Parliament House level 2 – proposed separation door

Hi everyone,

I have now heard from all of you in response to my request for your thoughts about installing an extra security door on Level 2, and I’m pleased that you are all of the same view.

Thank you for replying and for the helpful reasons you provided for not wanting the door.  I have now summarised those views and replied to Jim Robb on behalf of the National Caucus requesting that the status quo be maintained, while reserving the option to look at the matter again at some future date should problems be reported.

Kind regards,


That’s pretty crystal clear. National MPs and staff were unanimous in January they saw no need for the door. So you don’t need to be Sherlock Holmes to deduce Labour insisted on it.

Maybe Chris Hipkins could release the e-mails between himself and PS on the issue.

12 reasons National lost Northland

March 29th, 2015 at 8:58 am by David Farrar

There is no one reason why National lost Northland. I’ve identified a dozen contributing factors. However they are not of equal significance. Some were very powerful, and others had some impact around the margins. They are:

  1. Winston. I doubt any other candidate could have taken the seat off National. It’s a vote for him as much as a vote against National.
  2. By-election. By-elections often go against the incumbent Government, as this Stuff article shows, and third parties often do well. In fact 49 years ago Social Credit won the seat, then called Hobson.
  3. Mike Sabin. The circumstances of his resignation were a factor. But even before that, there was growing discontent in some circles over his performance – especially when compared to the ultra-enthusiastic John Carter, his predecessor.
  4. The bridge upgrade promise. This backfired massively (ONCB poll said overall made people less likely to vote National) as it looked like a response to Peters. Peters got credited with the bridges, and National lost some credibility. If there was a case for doing the bridge upgrades they should have been announced before Peters was a candidate, and it should have been a Government announcement. Trying to credit the decision to the lobbying of the local candidate (who could not name them all) was insulting the intelligence of the public.
  5. The candidate. Mark Osbourne, if he had won, would be a very good MP for Northland. But National made the mistake of selecting the person they thought would be the best MP, not the person who could best beat Winston Peters.
  6. National’s campaign. The campaign appeared to be run from Wellington or Auckland, not Northland. This was, in my opinion, a mistake. National HQ is very very good at running national campaigns, but less so at electorate level campaigns. In a by-election of course the party HQ will be far more involved, but that doesn’t mean running the entire thing. I heard a lot of complaints that locals felt disengaged and being treated like staff, not volunteers. There wasn’t even a local campaign committee, or a local campaign chair. And when I asked who was running the campaign, I got told three different names.
  7. Winston’s campaign. Winston campaigned well. He never had a melt down, or an angry rant against the media. It was back to charming Winston, not angry Winston. And the bus was a superb idea. Would not have worked in say Napier, but in a large seat with so many small towns, it created a buzz whenever it pulled up.
  8. No downside to voting Winston. National failed to clearly and consistently articulate a reason to not vote Winston. This was always going to be quite challenging, but voters say they could have their cake and eat it too – a National led Government, and Winston as a high profile local MP. National needed to more aggressively remind people that Peters has destroyed pretty much every Government he has been in.
  9. Neglected Northland. Northland felt neglected. Actually most provincial areas feel neglected – and this is regardless of who is in Government. It is a sad reality that provincial areas almost always are losing people to the larger urban centres, and they feel central Government is not in touch so much. National has overall done very well in staying connected to provincial NZ, but there is always an under-current of feeling neglected that can be exploited.
  10. The polls. Winston was very fortunate that the two initial TV polls were done just days after National selected Osborne. Of course a brand new candidate would not poll well initially. If the initial polls had occured say a week later, then they might not have shown Peters ahead or tied, and not given him so much momentum. Polls can be a self-fulfilling prophecy.
  11. Late start. With the benefit of hindsight, National should have started campaigning much earlier, and selected a candidate earlier. A three to four week period to select the candidate was too long. The Board should have set a 7 – 10 day timeframe for a rushed process, so the candidate could have had six to seven weeks to campaign, not four. Also the entire campaign apparatus should have sprung into operation the day after Sabin resigned. It looks like it mostly didn’t until after the selection. Some stuff you can’t do until you have a candidate, but not others.
  12. Tactical Voting. This had a major effect as seen by the Labour candidate getting less than 5%. It didn’t change the result, but it did impact the margin greatly. Labour did in Northland what they condemned National doing in Epsom and Ohariu – and it worked. Which is why  parties do it.

The challenge from National is to learn from this. It needs to be humble, and admit that they made mistakes. There were some factors they could not control, but some they could. They also need to show at a national level, that they are avoiding third termitis.

Some on the left will claim this is the beginning of the end. Well they’ve been claiming that for around six years. The polls in Northland showed the party vote had not moved much. However it is the first significant loss in pretty much a decade, and may have a symbolic impact. The challenge to National is to acknowledge that Northland was sending a message, and that past performance is not enough for future elections.

Also the party should review the by-election campaign with the same thoroughness as the review done after the 2002 election. Learning from mistakes is how you win in politics.

Osborne wins National’s nomination

March 1st, 2015 at 10:00 am by David Farrar

Mark Osborne got selected by 120 local delegates yesterday to be National’s candidate for Northland.

He is based in Taipa and is former General Manager of the Te Ahu Charitable Trust in Kaitaia. Currently the Asset Manager for Far North District Council. He is also a Trustee of Mangonui School, and helps run the family-owned local business Doubtless Beauty.

He’s won awards for his work in business, and to win the nomination against such a strong field says a lot.

Not quite right

February 28th, 2015 at 2:00 pm by David Farrar

Matt Nippert writes:

An analysis of electoral finance declarations shows more than 80 per cent of donations to National Party candidates were channelled through party headquarters in a loophole described as akin to legal “laundering”.

This statement is not correct. They did not go through party hq at all, or even near party hq. Some people donate to the *local* electorate committee and the local committee, if it has excess funds are paying the levy to hq, will partially or fully fund the local candidate’s campaign. It has nothing to do with party hq.

Electoral law requires candidates to reveal the identity of donors who contribute $1,500 or more, but political parties can keep donors secret even if they give up to $15,000.

There is a case for a lower disclosure limit for donations to electorates, rather than the main party. However it would be difficult to word such a law, as they are part of the same legal entity.

National Party president Peter Goodfellow strongly rejected any suggestion that donations to candidates from the party were used to obfuscate the source of funds.

He said the practice had more to do with time-frames around candidate selection and a longer-term fundraising cycle. “National is fundraising pretty actively throughout the three-year election cycle. People are donating to support a race before there’s even a candidate selected,” he said.

Mr Goodfellow said these donations were therefore impossible to tag to candidates and, “as our people often really give to the party”, were not be subject to the $1,500 declaration thresholds for candidates.

That’s a fair point. Even sitting MPs are not confirmed as candidates until election year – sometimes only three months before an election. So any donations prior to then *must* go to the party.

But it is fair to say that some donors prefer to give to the local party, rather than direct to a candidate’s campaign fund, because it does mean they can donate more than $1,500 without disclosure. However if they do so, they can not dictate how the electorate uses that donations. It might just as much go towards paying their levy to National HQ, their contribution to the party vote campaign, to covering local expenses or towards the candidate’s campaign.

Donation refunded

February 21st, 2015 at 12:00 pm by David Farrar

The Herald reports:

Electoral returns out next week will confirm that a National Party MP received $25,000 from a controversial businessman after Prime Minister John Key had a private dinner with him – at the man’s home.

The PM has always maintained that he met Donghua Liu at a National Party fundraiser but would never say where. Today, the Weekend Herald can reveal that the fundraiser was actually a private dinner at Mr Liu’s $4.75 million home in Remuera, where a smiling Mr Key and Jami-Lee Ross, the MP for Botany, were photographed alongside Mr Liu and his young family.

Afterwards, Mr Liu donated $25,000 that same month to Mr Ross’ election campaign. But the following year, Mr Liu became a political embarrassment for the Government after a Herald investigation revealed the impact of the property developer’s links to the National Party.

Shortly after the election, Mr Ross refunded the large donation from Mr Liu’s company – 15 months after it was given. Mr Ross has since disclosed the donation in candidate returns for the 2014 election due to be released by the Electoral Commission next week.

Mr Liu is upset that Mr Ross refunded the $25,000 cheque, which he regarded as a “slap in the face”.

The 53-year-old pleaded guilty to the domestic violence charges in April last year, but was in the Auckland District Court this week seeking to withdraw those admissions. He was successful and the case is likely to now head to trial.


Last night, Jami-Lee Ross said he did not intend to insult Mr Liu and any negative publicity associated to the businessman was not the reason the $25,000 was returned.

He said the Liu donation was given to be used in the local Botany campaign, but was not spent as a $24,000 donation from the National Party covered his expenses.

“So when the [donation and expense] returns were being put together after the election, it was decided the $25,000 should be returned to the donor because it was not used.

I think there is a useful lesson in this for National. I’m all for people donating to parties because they think a party’s policies will be good for NZ. But if a donation appears to be about influence, then parties should be wary.

Returning the $25,000 was the right thing to do, especially after the court case became known.It was of course not known at the time the donation was received.

The suggestion that it was returned because it was not used or needed is somewhat laughable. I’ve never known a party or candidate to return a donation on the basis they didn’t use it. Normally a party holds onto a donation as tightly as a crocodile holds onto its prey.

It is a good thing we have electoral laws that require transparency around donations. It allows the public to judge if they think a significant donation is appropriate or not. In this case, I think National’s concern was rightfully that it would not.


February 19th, 2015 at 3:00 pm by David Farrar

The Dom Post reports:

Staff at National Party headquarters have been told to observe council water conservation measures after a garden sprinkler was used in an apparent breach of council rules.

Party manager Greg Hamilton confirmed the sprinkler was running yesterday and said he would remind staff about water restrictions. …

The council’s restrictions allow watering only between 6am and 8am, and 7pm and 9pm. The unattended sprinkler was spotted running at about 8.10am.

I await the call for a commission of inquiry into Watergate!

“As far as the city council is concerned it doesn’t matter if the property is residential or commercially rated. Even if it does have a meter, it doesn’t mean people can start watering when others can’t,” he said.

The challenge is that the allowed hours are not hours when someone will be at a commercial property.

The five nominees for National in Northland

February 15th, 2015 at 12:53 pm by David Farrar

3 News reports:

National says the nominees will go before Northland party members before the final selection on February 28.

The nominees are Mita Harris, Matt King, Grant McCallum, Mark Osborne and Karen Rolleston.

“While the Northland electorate has been held by the National Party for many years, by-elections traditionally see lower turnouts and smaller margins. We will not be taking Northland for granted,” party president Peter Goodfellow says.

Mita Harris is the Chair of the Northland Conservation Board. A member of Ngapuhi, he stood for National in 2008. He is involved in numerous heritage, recreation and conservation projects in Northland.

Matt King is a local farmer, businessman and former police detective. He sought the nomination in 2011, and runs a private investigations company.

Grant McCallum is a local diary farmer and an elected board member on National’s Board of Directors.

Mark Osborne is the general manager of the Te Ahu Trust.

Karen Rolleston has stood for National in previous elections. She is the CEO of 3P Learning, and lives in Kumeu.

I’d say Karen and Grant are the front runners but all five candidates are credible and strong, and it will come down to the 120 local delegates, as they meet them and hear from them over the next fortnight.

Eminem vs National

February 12th, 2015 at 1:00 pm by David Farrar

The Herald reports:

The publisher of United States’ rap star Eminem is taking the National Party to court, with a hearing set down for next week.

Last year it was revealed that Eight Mile Style LLC and Martin Affiliated LLC, the Detroit-based publishers of Eminem’s copyrights, intended to sue the The National Party.

They allege the National Party breached copyright by using a song that sounded similar to Eminem’s ‘Lose Yourself’ in its campaign advertisements throughout the 2014 election.

In its earlier statement, the party rejected allegations the library music used in its campaign advertisements was a copyright infringement of any artist’s work.

The party had purchased the music from production music supplier Beatbox, based in Australia and Singapore, the statement said.

“As with all works licensed by the Beatbox library music service, the National Party was assured the music in question did not infringe any copyright and was an original work,” last year’s statement read.

The music license and fee were arranged through the Australasian Performing Rights Association and Australasian Mechanical Copyright Owners Society (APRA/AMCOS), who act as agents for Beatbox in Australia and New Zealand, organisations which existed to protect the rights of artists, the party said.


It will be interesting to see how it goes in court. I would have thought the legal action should be between Eminem and Beatbox, as Beatbox is the company that was selling the music National used.

Regardless of whether or not the National Party purchased the music through what they considered a “reputable supplier” such as Beatbox, Eight Mile Style was within its rights to sue as the party had used the song in their campaign advertisement, Mr Hazel said.

“The reason they will be going after the National Party is because they are the ones that actually used the work.”

However, Mr Hazel said if the National Party was found liable it could go after Beatbox with a claim to help pay any remedies, depending on the details of their contract with Beatbox.

When you pay a reputable supplier for rights to a song, it is pretty tough if you are the one in the gun if another artist then alleges it infringes.

11 seeking National’s nomination for Northland

February 11th, 2015 at 4:00 pm by David Farrar

Have heard from reliable sources that 11 people are seeking National’s nomination for Northland. There are several great candidates and the pre-selection committee will have a tough job reducing them to a final five to go forward to the full selection.

The pre-selection is Saturday, so the names of the final five will be released after that.

McCallum declares candidacy for Northland nomination

February 10th, 2015 at 9:00 am by David Farrar

Grant McCallum has announced:

Northland dairy farmer, Grant McCallum, has announced he will contest the nomination for Northland in the up-coming by-election.

His contribution to the local Maungaturoto community has included roles in Education and Sport. He now feels it is time to seek the support of the Northland National Party to be its candidate and to represent the people of Northland in Parliament.

“After careful consideration, my family and I have decided the time is right to put my name forward. This is an opportunity to work with all of Northland’s communities and serve the people of Northland –to continue the work of the John Key led Government in focusing on the opportunities in the North, both economic and social. If selected, I will be a strong voice for Northland in the National Government.”

Grant is a local and will be a strong contender for the nomination. He has been a member of the Party’s Board of Directors for some years, winning election at the annual conference.

I’m sure there will be other strong candidates also. The selection will be on 28 February.

National’s Northland selection

February 2nd, 2015 at 7:00 am by David Farrar

I hear on the grapevine that National will select its candidate for the Northland by-election on Saturday 28 February. This means that the by-election will be on Saturday 21 or 28 March as it must be held 20 to 27 days after nominations day.

The reason that the candidate selection will take a while is that unlike parties where the head office basically makes the selection, this will require aspiring candidates to travel around the entire Northland electorate which stretches from Wellsford to Cape Reinga, a 350 km distance.

I understand National currently has close to 1,400 financial members in Northland. This means that there will be around 140 delegates making the selection. Most aspiring candidates will try and meet every delegate one on one.

The strong membership base will help with the campaign. You need a big campaign team to cover so much area.

Quite a few people already expressing interest in the nomination. It should be a well contested candidacy.

Mike Sabin resigns

January 30th, 2015 at 12:07 pm by David Farrar

Northland MP Mike Sabin has resigned as MP for Northland for personal reasons. There have been media reports that he has been under Police investigation over an assault complaint or complaints, so it seems a logical deduction that he is resigning to be able to focus on the allegations.

Always sad for an MP to resign over something like this. I think he has made the right decision to resign. It would be very difficult to remain an MP in such circumstances.