Smith on water

June 2nd, 2016 at 11:00 am by David Farrar

A good column by Nick Smith:

News that companies are extracting millions of litres of water for bottling and export has got the Green Party demanding a moratorium, Labour a new water tax and New Zealand First a prohibition on export.

So the Greens want to ban bottled water, NZ First want to ban exporting it and Labour wants a special tax on water.

New Zealand has 500 trillion litres of water flowing through our lakes, rivers and aquifers. Each year we extract 10 trillion litres, or 2 per cent. The water shortages we have are in quite defined areas and for only some of the year. NZ has no overall shortage.

The 10 trillion litres of water we extract each year is made up of six trillion for irrigation, two trillion for municipal supplies and two trillion for industry. Three billion litres used for the bottled water industry may sound a lot but it is less than 1 per cent used by industry and 0.004 per cent of the annual resource. The suggestion by some that Mr and Mrs Average Kiwi won’t be able to bathe because of bottled water exports is ridiculous.

0.004% is what they are complaining about.

Regional councils manage about 20,500 water permits of which 41 are solely for water bottling and a further 30 for a mix of uses, including bottled water. But only 23 of the permits are being used for now, reflecting the fact this is a niche industry. More than a dozen water-bottlers have gone broke. It is a myth that this is an easy industry in which to make lots of money.

This is true.

The only fair charging option would be to charge everyone. I heard one opposition MP call for a uniform charge for all commercial water users of 10c a litre. Kiwis need to appreciate that our major export earners such as horticulture and dairying are water intensive. A litre of milk takes about 250 litres of water to produce so that would be an extra cost of $25 a litre – a cost which would push the price of milk through the roof for consumers and destroy our largest export industry.

The Government is open to modest charges for water users, for the cost of managing water resources. We are proposing as part of our current freshwater reforms to allow councils to charge water users a per-litre levy for the costs of the water quality, monitoring water takes and ensuring compliance, rather than on rates paid by everyone. However, the charge would be for cost recovery only and would not price the natural resource.

That seems fair. User pays.

Scaremongering from Forest & Bird

August 21st, 2014 at 3:00 pm by David Farrar

Nick Smith released:

Calls by Forest & Bird for the Department of Conservation to stop Bathurst Resources’ preparatory mining work on the Denniston Plateau because of smoke coming from an old mine shaft are ill-informed, Conservation Minister Dr Nick Smith said today.

“The smoke is coming from an old mine shaft where low level underground fires have burned for decades. These fires also occur naturally in this rich coal field. These smouldering seams pose no significant threat and are left to burn naturally. Smoke appears periodically relative to atmospheric conditions and has done so for many years,” Dr Smith says.

“It is ridiculous for Forest & Bird to blame Bathurst for these fires and to demand any work stop before they are put out. The smoke is some kilometres from Bathurst’s escarpment mine. Forest & Bird should check with the Department and be better informed before making these sorts of public claims.

“This smoke from an old mine shaft just highlights the degree to which the Denniston Plateau has been previously mined and that it is not the pristine area that some claimed.  It reinforces the Government’s decision to allow the Denniston mine to proceed.”

So the smoke is from a location many kms away from where Bathurst is mining, yet Forest & Bird blame it on them. Anything for a headline!

Not a trend we want to encourage

July 29th, 2014 at 10:00 am by David Farrar

Stuff reports:

Nelson MP Nick Smith and his Waitaki counterpart Jacqui Dean are accustomed to pressing the flesh but one of them will be exposing it in public and online come the end of the year.

Smith hopes it won’t be him.

“I really need Nelson to pull out all stops as they do not want to see me wearing my togs in Trafalgar St,” he said.

Dean has a similar view: “I don’t think that Wanaka is ever going to be ready to see me in a bikini, not now, not ever.”

The National Party pair, with an eye on pre-election publicity, are backing their electorates in the Gigatown competition, which is currently led by Wanaka, with Nelson holding third behind Timaru.

They’ve pledged to take a “selfie” wearing their togs on the town’s main street and posting on their website or Facebook if their town is pipped.

If neither town makes the final top five, to be selected at the the end of September, they’ll both be stripping.

This is not a trend we want to encourage. I prefer my MPs in suits, not togs 🙂

I thought National stood for development and jobs?

May 30th, 2014 at 7:00 am by David Farrar

Nick Smith has announced:

The application by Riverstone Holdings Limited to build and operate a $240 million monorail in Fiordland has been declined by Conservation Minister Dr Nick Smith.

“This proposal does not stand up either economically or environmentally. The independent tourism and financial analysis concluded it was not viable. There would be a significant impact on the area’s flora, fauna and natural heritage. The route is not sufficiently defined to properly assess the impacts,” Dr Smith says.

“Developments in an area with World Heritage status and which impact on the Fiordland National Park must meet the highest of standards and I have concluded that the risks of this proposal are too great.”

The Fiordland Link Experience proposed a new link between Queenstown and Milford Sound consisting of a 20-kilometre boat excursion across Lake Wakatipu to Mt Nicholas Station, a 45-kilometre all-terrain vehicle ride to Kiwi Burn, a 43.8-kilometre monorail ride to Te Anau Downs and a 90-kilometre coach journey to Milford Sound. The application included a lease, licence and concession for the monorail and related infrastructure through the South West New Zealand World Heritage Area including the Snowdon Forest and Fiordland National Park.

I think this is an incredibly disappointing decision. The monorail proposal would have provided a hugely enhanced visitor experience to tourists, and been a real boost to jobs and tourism. It did not go through Fiordland National Park, but merely neighbouring basic conservation land.

It wasn’t just going to be a monorail, but also have a mountain bike trail next to it (using the construction track), plus a catmaran link. Could you imagine a cool 40 km mountain bike trail into Te Anau Downs? Stunning.

I regard the reference to economic considerations to be a red herring. The job of the Conservation Minister should be to assess the environmental impact, not the business case. All that one needs to do is to have a condition that if the project fails, then there are sufficient funds held in trust to remove the infrastructure.

So that leaves the environmental considerations. Well two independent DOC officers (and DOC is hardly a hotbed of pro-development staffers) recommended that the consent be granted as the environmental impact was relatively minor (my words). So we have the Minister going more green than his own department. It’s what I’d expect from a Labour/Green Government – not National.

Incidentally my company Curia did a very small poll for the developer on public attitudes towards the proposal. The cost was tiny, and is not a factor in my views.

I don’t mind Governments being pragmatic, so long as their decisions still move New Zealand in the right direction. I don’t think this decision moves NZ in the right direction. I think it is a kick in the face for tourism and jobs. It will deter other operators from trying to get permission to do developments that boost tourism, if they think that their proposal won’t succeed regardless of the merits.

Own goal by Mallard

August 29th, 2013 at 3:00 pm by David Farrar

Barry Soper reports at NewstalkZB:

Over the next three weeks the spotlight will be on Labour and in particular the three wannabes. 

But it’s a party that can’t help tripping over itself as it did yesterday when Trevor Mallard flew into the bear pit, accusing the pedantic Nick Smith of bludging off the taxpayer after he tearfully relieved himself of his ministry last year when his Bronwyn Pullar conflict of interest became an embarrassment. 

Of course he’s repented and is now back in the fold. Mallard claimed he’d stayed on in his taxpayer supplied ministerial home when he wasn’t entitled to. 

Smith tells us he stayed on for a couple of weeks so that his kids could finish their school term which would seem reasonable in the circumstances. 

But big Gezza Brownlee wasn’t going to let them get away with that. He ruffled Mallard’s feathers, saying what’s good for the goose is good for the gander. 

If he expected Smith to cough up some cash then what about Dithering David doing the decent thing? 

Since making the dramatic announcement last Thursday, and then refusing to take any questions about it, Shearer got on the next plane out of the capital and will be lying low for the next three weeks. 

He’s still picking up his leader’s salary and the perks that go with the job, which Gezza says is a bit rich given Labour’s view of Smith’s indiscretion. 

More points on the Tory board then as Labour again scores an own goal!

As far as I can tell Trevor Mallard seems to be claiming that if you lose a job which has accomodation as part of it, you should be evicted from that house the same day.

Presumably he thinks if a Police officer resigns, they should be evicted from their Police accomodation immediately. Likewise Railways use to have many homes for staff. Again Labour now seems to say there should be no grace period at all – you should have your furniture thrown out that afternoon.

Presumably Trevor has written a refund cheque for staying on in his ministerial house after the 2008 election, rather than moving out that night.

As this Herald story pointed out, outgoing Ministers were given a dignified time:

Prime Minister John Key pointed out that when National entered Government he encouraged outgoing Prime Minister Helen Clark to remain in Premier House in Wellington as long as she wanted, at no cost.

Leader of the House Gerry Brownlee suggested that outgoing Labour leader David Shearer should have his privileges stripped because he had stepped down and was absent from Parliament.

This is the all too common problem in Labour – go for the easy hit, and not worry about consistency.

UPDATE: Trevor would not have had a Ministerial house as he is a Wellington MP. But his colleagues of course did, and I am sure did not pay rent for staying on for a few weeks after they lost in 2008. Unless they had already packed up before the election!

A disappointing decision

July 18th, 2013 at 9:00 am by David Farrar

The Herald reports:

Controversial plans for a tunnel between Queenstown and Milford Sound have been rejected by Conservation Minister Nick Smith.

Dr Smith said he was declining the application because the environmental impacts were “significant” and beyond what was appropriate in two of New Zealand’s most spectacular national parks.

Milford Dart Limited had applied for permission to build a $170 million, 11.3km, five-metre diameter, single-lane bus tunnel that would have slashed the nine-hour journey time between the tourist hotspots.

How disappointing. The journey to Milford is insane, and a major turn off.  I don’t see how having hundreds of buses driving man extra hours on the roads is good for the environment.

All facilities to get tourists in have some impact on a high value conservation area. But without them, no one at all would ever get to see them and value them. The Daintree Rain Forest has a gondola for example.

A tunnel would have far less visual impact than a road as it is well, underground, apart from the entrance and exit. I was hoping the application would be approved. If it had got the go ahead, I reckon in 20 years time everyone would be saying it should have happened a long time ago. Now, it may never happen.

Smith on land boundaries

June 11th, 2013 at 9:08 am by David Farrar

Anne Gibson at NZ Herald reports:

Housing Minister Nick Smith wants Auckland to break out of its boundaries, saying that without change, ownership dreams are being killed.

“If you put a straitjacket around the city and say only land for residential development is in that defined line, you’re gifting a massive capital gain to those rural land owners,” he said, citing a Flat Bush property bought in 1995 for $890,000 and now on the market for $112 million – a situation he called “obscene”.

Land bankers had been encouraged to hold their parcels and strangle supply, the minister said.

“Because they have a monopoly, they are able to make those sorts of profits and the best way to stop it is to actually create a greater degree of freedom,” he said, citing the housing accord between the Government and city council intended to improve housing affordability.

“We cannot walk away from the issue that restrictive land supply policies across the world are at the heart of the housing affordability issue,” Dr Smith said.

Land supply is not the only factor, but it is the major factor. Any approach that fails to deal with land supply will be ineffectual.

“They’ve appreciated in value by approximately 20 per cent a year. The cost of capital is going to be about 8 per cent a year. People will stop land-banking when they think we’ve got our regulatory act together between local and central Government and we’re not going to allow that sort of ongoing monopoly of land supply. The land banker had no incentive to do anything,” Dr Smith said.


Silly comparison

May 22nd, 2013 at 6:49 am by David Farrar

Danyl at Dim-Post looks at the share price of Fletchers over the last month after Nick Smith 10 days ago announced an inquiry into the cost of building materials. As the price has dropped Danyl says:

According to the Steven Joyce/Fran O’Sullivan theory of political sharemarket vandalism, Nick Smith has ‘destroyed’ about $260 million dollars worth of wealth in the last ten days. I look forward to their columns/press releases warning of capital flight, skies raining blood etc.

This is one of Danyl’s more silly comparisons. In his world I guess there are no shades of grey. An inquiry into high prices is the same as a unilateral announcement with no consultation that the Government is going to dismantle the competitive market and set prices.

Let’s look at what Nick Smith actually said:

Housing Minister, Nick Smith, speaking on “The Nation” said there was significant concern that items “the likes Batts, likes of Gib and concrete” were more expensive than what they were in Australia.

Batts and Gib are Fletcher’s brands and the company is a major concrete supplier.

But Mr Smith denied the Government was singling Fletcher’s out.

“We need in a very thorough way not on the basis of rumour or speculation, on the basis of really good analysis and information, to have a hard look at how the building materials’ market is working and to ensure that there are the competitive pressures that are there,” 

“In terms of tariffs and those things, you know New Zealand has a pretty liberal regime for bringing products in, but are there other barriers? 

For instance, we have a Body Standards New Zealand that sets the standard, and sometimes I’m concerned that the industry groups have too much influence over those standards, that are then effectively adopted by councils and do not allow product from overseas to be able to give Kiwis real choice about those products.”

Mr Smith said his inquiry was going to look what regulatory tools that the government had at its fingertips, that could try and get building materials costs more reasonable for the industry. 

So no mention or even hint of price controls. In fact the announcement seems focused on increasing competition in the market, and reducing regulatory costs. And also note that these products are just a few of many produced by Fletchers.

This is hardly in the same universe as what Greens and Labour did with Contact Energy and the 13 other generators. They have been attacking Contact for a couple of years, claiming (falsely) their prices are higher than the SOEs. Contact has only one product – electricity, and their announcement was that if elected they will unilaterallly determine the price Contact can sell electricity at in the future. This is the Government deciding the price for the sole product Contact produces. It is not about increasing competition, but removing it all together. It is in fact a de facto nationalisation as if the Government gets to set the price you charge for your sole product, they effectively own your company.

So as I say, the comparison is beyond silly.

The Auckland Housing Accord

May 11th, 2013 at 10:05 am by David Farrar

Nick Smith announced:

An Auckland Housing Accord has been agreed today by Housing Minister Dr Nick Smith and Auckland Mayor Len Brown to urgently increase the supply and affordability of housing in Auckland. …

The legislation, to be introduced to Parliament as part of Budget 2013, will enable Special Housing Areas to be created by the Auckland Council with approval of Government. In these areas it will be possible to override restrictions on housing put in place by Auckland’s eight predecessor Councils, like the Metropolitan Urban Limit.

Qualifying developments in these Special Housing Areas will be able to be streamlined, providing they are consistent with Auckland’s Unitary Plan, once it is notified, expected in September this year. New greenfield developments of more than 50 dwellings will be able to be approved in six months as compared to the current average of three years and brownfield developments in three months as compared to the current average of one year. The streamlined process will not be available for high rise developments that will need to be considered under existing rules until the Unitary Plan has been finalised in 2016.

“This is a three year agreement to address these housing supply issues in the interim until Auckland Council’s Unitary Plan becomes fully operative and the Government’s Resource Management Act reforms for planning processes take effect.

“The Government respects in this Accord that it is for Auckland to decide where and how it wishes to grow. The Government is giving new powers for council to get some pace around new housing development and is agreeing on aspirational targets to ensure Auckland’s housing supply and affordability issues are addressed.

“The Accord sets a target of 9,000 additional residential houses being consented for in Year 1, 13,000 in Year 2, and 17,000 in Year 3. This is a huge boost on the average 3,600 homes that have been consented each year over the past four years and the 7,400 a year over the past 20 years.

The only way one can reduce the price of housing in Auckland is to reduce demand or increase supply. Now assuming you can’t start deporting Aucklanders to Gore, that means increasing supply.

39,000 houses in three years compared to 3,600 homes a year is massive.

And best of all it doesn’t involve the Government borrowing hundreds of millions of dollars to try and become a large scale property developer itself.

Congrats to Len Brown and Nick Smith for working together to do something meaningful in this area.

The Akaroa Marine Reserve

April 14th, 2013 at 2:26 pm by David Farrar

Nick Smith has announced:

A new marine reserve in Akaroa Harbour has been approved by Conservation Minister Nick Smith.

“Akaroa is an iconic harbour that is hugely popular for recreation and tourism but its marine life is degraded. I have approved this new reserve around the spectacular Dan Rogers Bluff because it will enhance the area, assist scientific study and benefit the public,” Dr Smith said.

The Akaroa Harbour Marine Protection Society Inc. made a formal application for the marine reserve in January 1996. The formal consultation had 2334 submissions in support and 709 objections, with the principal opponents being Ngāi Tahu and recreational fishers.

“I have carefully considered the passionate and strongly felt arguments put by both supporters and opponents of this reserve. I have not upheld the objections but have decided to adjust the northern boundary by 55ha, reducing the reserve to 475ha, to take account of concerns from customary and recreational fishers.

“It is my usual preference to secure some degree of consensus about the desirability of having new areas of marine protection, as was the case with my announcement last month of five new marine reserves on the West Coast of the South Island. This has not been possible with the Akaroa proposal despite the best endeavours of six Ministers over nearly two decades. I concluded, with the support of both the applicant and principal objectors last month, that consensus in this case was not possible and that I needed to proceed to make a decision.

Incredible it has taken almost 20 years!

Smith targets Auckland metropolitan urban limit

March 7th, 2013 at 12:00 pm by David Farrar

The Herald reports:

New Housing Minister Nick Smith is vowing to break the “stranglehold” of Auckland Council’s policy of containing urban sprawl – a policy he says is “killing the dreams of Aucklanders” by driving up house prices.

In his first major interview on how he plans to tackle the housing affordability issue handed to him in January’s Cabinet reshuffle, he said his focus would be on opening up land supply because land prices were the biggest factor putting home ownership out of reach of many Aucklanders.

“There’s no question in my mind that we have to break through the stranglehold that the existing legal metropolitan urban limit has on land supply,” he said.

Excellent. This is the first time a Minister has been this explicit.

The MUL is the enemy of affordable housing. No amount of subsidies, intensification, central planning, economies of scale can defy the reality that if the supply of land for housing is artificially constrained, then the price of land (and hence housing) will increase in line with demand. Arguing against this is like arguing against gravity.

“When we are looking at growth in Auckland of 2 per cent a year, we are going to need sections at the rate of 12,000 a year,” he said. “The metropolitan urban limit is a stranglehold on land that is killing the dreams of Aucklanders wanting to own their home and we have to work with the council to find the tools to increase that land supply and bring section prices back.”

If someone wants to be elected Mayor of Auckland, they should run on a policy of increasing the MUL, to reduce housing costs.

But Mr Brown said Aucklanders had already agreed on the city’s “compact footprint” through developing the first Auckland Plan, and Dr Smith should stop debating it.

He said the plan was based on “a model that is developing truly internationally competitive cities with strong economic bases to them and that give rise to outstanding transport operations within a more compact framework”.

“Have a look at Melbourne,” he said. “Have a look at Hong Kong. Have a look at London. All of those cities, by and large, are operating off what is regarded as best practice.”

Comparing Auckland, one of the world’s smallest cities, to London and Hong Kong – two of the world’s three global centres is ridicolous.

But the comparison to Australian cities such as Melbourne is more sensible. Len Brown is saying that Auckland should be more compact, such as Melbourne and Australian cities are. So what are their urban densities? Demographia has this 2012 report:

  • Adelaide 1,400 people per square km
  • Brisbane 1,000
  • Canberra 1,100
  • Melbourne 1,600
  • Perth 1,300
  • Sydney 2,100

And what is Auckland? 2,400 people per square km.

Auckland has twice the urban density of Melbourne – which Len Brown cites as a model. If we increased the Auckland urban limit by 50%, then it would be the same as Melbourne.

Key kept that close to his chest

January 22nd, 2013 at 12:20 pm by David Farrar

Well John Key managed to surprise me and most other people, and has done a quite significant reshuffle, with a substantial rejuvenation of the Ministry.

Those leaving the Ministry are:

  • David Carter to become Speaker
  • Kate Wilkinson
  • Phil Heatley

Kate and Phil have performed well in their portfolios, and their departures are not sackings. It is simply the reality I talked about this morning that you need rejuvenation.

Promoted direct into Cabinet is Auckland Central MP Nikki Kaye who has become Minister of Food Safety, Civil Defence and Youth Affairs and Associate Minister of Education and Immigration. She will be the youngest female Minister in National’s history.

Senior Whip Michael Woodhouse becomes a Minister outside Cabinet as Minister of Immigration, Veterans’ Affairs and Associate Transport.

Simon Bridges moves into Cabinet from outside and gets more grunty portfolios of Labour and Energy.

Oh and as expected Nick Smith moves back into Cabinet as Housing and Conservation Minister. Paula Bennett is made Associate Housing.

Nathan Guy as expected gets Primary Industries and Jo Goodhew Associate.

Chris Tremain pciks up Local Government Minister.

And in a very good move Steven Joyce is put in charge of Novopay, and fixing the problems there.

The caucus will need to elect a new senior whip, but I can’t imagine any reason whu junior whip Louise Upston won’t succeed to that – so the focus is probably more on who from 2011 may step up to become junior whip.

I’m delighted that the PM has been bolder than expected, and effectively brought forward what I thought would be a year end reshuffle. And I’m looking forward to the new Ministers making a difference in their new portfolios.

Big thanks to Phil and Kate also for their service.

Mayor Bob is wrong

August 21st, 2012 at 9:00 am by David Farrar

Tina Law reports:

Dr Smith said hysteria was sweeping the country about the practice, and he called for some “science and commonsense” to be injected into the debate.

He likened the fracking debate to a modern-day version of the Chicken Licken story, in which a hen thinks the sky is falling in after an acorn hits her head.

He accused the Christchurch City Council of “jumping on the Greens’ ‘Don’t Frack with New Zealand’ bandwagon”, saying fracking had been done in New Zealand for decades and was used in the building of the Clyde Dam.

But Christchurch Mayor Bob Parker said Christchurch had experienced 12,500 quakes, so it was “entirely reasonable” for the city to ban the controversial practice until someone could provide evidence it would not trigger more of them.

“We’re not going to take a risk on something that we are uncertain about until there is some certainty.”

Absolutely wrong. You don’t ban things until they are “proven” safe (an impossible thing to do). You ban things when they are proven unsafe.

It was not an entirely reasonable thing to do. It was an entirely kneejerk thing to do.

Nick Smith on fracking

August 14th, 2012 at 7:00 am by David Farrar

Nick Smith writes in the Herald:

The hysteria sweeping the country over fracking is like a modern-day version of the Chicken Licken story.

It is not the fear of the sky falling in but of what is happening underground that is seeing the formation of anti-fracking groups. Councils in Christchurch, Hawkes Bay, Dunedin, Hastings and Kaikoura, as well as many community boards, have jumped on the Greens’ “Don’t Frack with NZ” bandwagon. It is time to inject some science and common sense into the debate.

Fracking, or hydraulic fracturing, has been used in New Zealand for decades. Some 25 years ago, fracking was used in the construction of the Clyde Dam while I was undertaking my doctoral thesis in geotechnical engineering. Fracking is used to develop geothermal energy fields and to enhance oil and gas recovery in the petroleum industry. It is similar to “well stimulation” in the water industry.

As Nick points out he knows a bit more about this stuff than the average MP or city councillor jumping on the bandwagon.

The first environmental risk cited by those seeking a ban is that fracking can trigger small earthquakes. This is true for all sorts of engineering works. A magnitude 4 earthquake was triggered by the filling of Lake Pukaki in the 1960s. Lots of small earthquakes are triggered by constructing pile foundations for buildings, bridges and wharves. Hundreds of small quakes are occurring with the current geothermal energy developments north of Taupo. The few small earthquakes that could be caused by fracking need to be considered in the context of there being 18,000 naturally occurring earthquakes over magnitude 2.5 across the country a year. New Zealanders have more to fear from the vibration of their mobile phone than that caused by fracking.

Nice. That puts it into context.

The second concern is pollution of New Zealand’s waterways and aquifers. These risks are also low. The proppants used are just fillers. They pose fewer health risks than sand in the family sand pit. The lubricants have a toxicity similar to dish washing liquid. The far greater risk to water quality is the natural contaminants from underground that may be picked up by the water during drilling or fracking of a well. This is particularly true of geothermal wells in volcanic strata that often contain toxic chemicals.

The argument here is not that fracking is risk-free but rather that the risks are manageable. This is the conclusion of the Taranaki Regional Council which has overseen 20 years of petroleum industry fracking without incident. The United States Environmental Protection Authority has come to a similar conclusion. A detailed inquiry just published by the Royal Society and Royal Academy of Engineering in the United Kingdom also concludes the technology can be used safely. We do need to ensure wells are properly sealed, that drilling and fracking wastewater is responsibly managed and that ground vibrations are monitored and minimised.

As Nick says fracking is not new, and it is about risk minimisation and management. The calls by the Greens and associated politicians to ban fracking temporarily or indefinitely are the modern day anti-science witch-hunt.

There are huge geothermal energy resources in the upper North Island that can be developed only with fracking. It is contradictory for the Greens to campaign on a platform of creating 100,000 jobs from renewable energy, identify geothermal as a key opportunity and then propose a fracking ban that would kill this industry.

Just as they whine loudly about affordable housing and bitterly oppose freeing up more land to reduce land prices.

Fracking technologies are underpinning an energy revolution in the United States. Huge unconventional shale gas resources in Louisiana and Pennsylvania are coming on stream, enabling gas to replace coal-fired electricity generation. Gas emits one-third the greenhouse gas emissions of coal. This low-cost gas is also reducing American dependence on the Middle East.

So fracking can be good relatively for the environment.

The Parliamentary Commissioner for the Environment, in response to demands from the Greens, is undertaking an inquiry and will report by Christmas. I fear this will unfold in a similar way to when the Greens demanded a Royal Commission on Genetic Modification, but then rubbished its conclusions.


I am passionate about New Zealand’s natural environment. I want to bequeath my children and grandchildren a nation with a great lifestyle, a strong economy and a clean environment. That will only be possible if we take a rational and science-based approach to our natural resources and risk management. Fracking may have too many letters in common with our favourite swear word, but it is the least of New Zealand’s environmental worries.

An excellent column.

Will Nick return?

June 10th, 2012 at 10:00 am by David Farrar

The Ashburton Guardian reports:

Former cabinet minister Nick Smith has hinted about a possible return to the top table after Prime Minister John Key this week indicated such a move was not out of the question. …

Mr Key was asked about Dr Smith’s future in Cabinet in light of the police decision and he said that while he could not rule it out, it depended on the outcome of other inquires.

Dr Smith, who was in Ashburton yesterday at a Federated Farmers water forum, was asked whether he would be back in Cabinet.

He quoted Winston Churchill in reply: “Politics is almost as exciting as war, and quite as dangerous. In war you can only be killed once, but in politics many times.”

Heh, Nick has used that quote many times.

My expectation is that Nick will return in October, when Lockwood Smith will become High Commissioner to London and probably David Carter the new Speaker.

The benefits of Nick returning are an experienced and capable Minister. The risks are that if he makes another error of judgement then it will be the PM held responsible, not the Minister.

Will Smith return?

April 3rd, 2012 at 11:00 am by David Farrar

Audrey Young writes at NZ Herald:

John Key’s reshuffle yesterday promoted Simon Bridges and Chris Tremain and leaves the way open for Nick Smith to come back if the Prime Minister deems he has been punished enough. …

Local Government and the job of shepherding through major reforms in the area designed by Dr Smith has been allocated to Primary Industries Minister David Carter.

But Mr Carter is one of the contenders for the position of Speaker to replace Lockwood Smith, who is earmarked for the role of High Commissioner to London this year.

If Mr Carter becomes Speaker, Dr Smith could be rehabilitated back into the ministry without much fuss.

As I see it, there’s four issues here, around whether Nick Smith might return to the ministry.

  1. Will John Key change his previous policy of not having former Ministers return to the ministry. The public get rather cynical if a resignation in fact turns out to be a temporary sin-bin. They know that in the real world if you resign your job, you don’t get it back in six months.
  2. David Carter may not become Speaker. As I understand it the three main contenders are David Carter, Anne Tolley and Maurice Williamson.
  3. What risk is there that if returned to the ministry, Nick may commit another judgement of error. Because if a PM returns a Minister to the ministry, and there is a further judgement of error – then the media and public will hold the Prime Minister responsible, not the Minister.
  4. Against the risks in (1) and (3) you balance the benefits of having an experienced and effective Minister back in the Cabinet.

It will be interesting to see what happens in due course.

Influence is never in writing

March 26th, 2012 at 12:00 pm by David Farrar

Labour are saying that Nick Smith may have intervened on behalf of other friends, and that there needs to be an inquiry to determine this. Personally I thought his letter on behalf of Pullar made it pretty clear how reluctant he was to do anything. But it has also dawned on me that the fact he actually wrote a letter actually strongly implies that he was not trying to improperly influence things for Pullar. Why? Well, because he did in fact put it in writing.

If Nick had really been trying to screw the scrum for Pullar, the last thing he would have done is sign his name to a letter acting as a referee for her health before her accident.

If a Minister wants to push a department or agency in a particular way, they do not leave fingerprints. This will be officially denied, but ask any former Ministerial staffer from either party.

If Nick had really wanted to get ACC to give Pullar special treatment, he would have had his minsierial advisor phone the CEO. The ministerial advisor would say something like “The Minister is very concerned about this case”. That is code for “fix it”. They might say stuff like “The Minister is concerned that this could become a high profile story” and “The Minister wants to protect the PM who is constantly getting lobbied on this issue” or “The Minister thinks it would be prudent to assure yourself that the claimant has got everything they are entitled to, and has not been disadvantaged by ACC’s actions”.

Now none of this changes the fact that Nick’s actions in writing the reference were not acceptable. But in terms of motivation, I do think that they do show his intention wasn’t to apply improper pressure on ACC.  He was trying to placate Pullar. Otherwise he could have just got one of his staff to make a discrete phone call.

And no, I am not saying that agencies will break the law or even their own policies just to please a Minister. However many decisions are subjective and can go either way. It is in those situations, that Ministerial desires can have an impact.

High praise

March 25th, 2012 at 11:51 am by David Farrar

In a HoS story, they report:

But Vergne Wilson, whose wife left him for Smith, says the politician should not have resigned.

Wilson was married to Linley Newport for 10 years, before separating in 2005. The same year, Smith split from his wife of 20 years, Cyndy.

Smith and Newport’s paths had crossed in 2004, through Smith’s constituency work, and they became a couple a year after their separations. They married in 2009.

Wilson said he was disappointed to see Smith step down from his portfolios.

“It is sad that it has come to this because he has always acted with integrity and genuinely believes in what he’s doing.

“He is passionate about his job. He’s a hard-working guy and loves what he does.”

The trio continued to have a great relationship and Wilson visited the children in Wellington when he could.

“It really upsets me that the family is going through this. It is a huge upset for them.

“My kids love him and he has genuine affection for them. If your wife was going to marry someone else, you couldn’t pick a better guy or stepfather.”

Relations between fathers and step-fathers are often less than cordial. That’s very high praise from your partner’s ex.


March 23rd, 2012 at 10:36 am by David Farrar

Labour voted that Winston Peters did nothing wrong when he consistently lobbied on behalf his then friend Owen Glenn to be made Honorary Consul to Monaco, without revealing that Glenn had paid $100,000 of Winston’s legal costs.

Yet Labour now say that Nick Smith writing a letter on behalf of a friend testifying to her health before an accident, is terrible, and there must be an inquiry.

Don’t get me wrong. My position all along is that Nick Smith was wrong to write that letter. And doing so on letterhead even worse.

But let’s just remember the huge hypocrisy of Labour and Winston here. Winston actively lobbied and pressured MFAT and Helen Clark of behalf of Owen Glenn, in his role as Foreign Affairs Minister. And never disclosing that Glenn’s ties to him. This all went to Privileges Committee, and despite a abundance of evidence, Labour voted against the Privileges Committee report. This act of tolerance of corruption was so sickening not even Labour poodle Jim Anderton could bring himself to vote against – he abstained.

And we won’t even mention their months of defence of Taito Philip Field, claiming all he was guilty of was working too hard for his constituents.

Again this is not a defence of Nick Smith. This is just pointing out the hypocrisy from Labour and Winston. Maybe someone could ask some of the Labour MPs who voted against the Privileges Committee report why it is bad for the ACC Minister to write a reference for a friend for ACC, yet fine for the Foreign Affairs Minister to lobby for a diplomatic position on behalf of a friend who paid $100,000 of his legal bills.

Nick Smith resigns

March 21st, 2012 at 2:02 pm by David Farrar

Nick Smith has just announced to the House he has resigned as a Minister of the Crown, and John Key has accepted his resignation.

A sad end to his ministerial career.  It’s a stark reminder that Ministers must be like Caesar’s wife – above suspicion, in matters of personal advocacy – especially in your own portfolio area.

Nick has a very solid record of achievement as a Minister in the 4th and 5th National Governments. He should be proud of his achievements in diverse areas. He will be missed as a Minister by his colleagues.

More on the ACC saga

March 21st, 2012 at 12:29 pm by David Farrar

I blogged yesterday:

As Nick has now conceded it was an error of judgement. You can quibble over the fact the letter was to independent medical assessors, not ACC. But the reality is Nick should have declined to write the letter at all, just as he had also declined to intervene with ACC. There were many other people who could write a letter about how Bronwyn was before her accident.

Doing the letter on parliamentary letterhead compounded the failure of judgement.

I also blogged:

While a failure of judgement, I was pleased to see a journalist tweet that David Shearer had declined to say he thinks the lapse in judgement was serious enough to warrant resignation.

Since then Shearer has changed his stance. Patrick Gower blogs on it, saying Shearer had a shocker.

I also blogged:

 I’m not actually against a fuller independent inquiry, because while I do not think anyone has acted with malign motives, the perception is that it is very murky and sunlight is the best disinfectant. However it might be that the Privacy Commissioner inquiry will be wide enough.

I am now of the view that an independent inquiry, at a minimum, is necessary. The Privacy Commissioner can only cover the privacy issues around the data breach, and can not cover the wider issues. The speculation on the nature of the friendship does raise issues that need to be dealt with.

If the terms of reference were wide enough, it could in fact cover the entire history Pullar has with ACC (something she wants). Not often I quote Bomber Bradbury, but I think he is correct when he says:

Even National Party activists deserve to be treated with dignity and watching ACC throw Bronwyn to the Police over a faked allegation that she threatened to expose ACC negligence in return for compensation boils my blood. I say faked because the doyenne of the right, MFB (Michelle Fucking Boag) was in that meeting. Say what you will of ‘chelle, but she ain’t stupid enough to rock up to ACC in the capacity of a support person and threaten them with a bribery option. …

 through their own negligence they release confidential papers and when called on it, bully and intimidate a woman who has an existing complaint against them. 

This doesn’t change my view that Pullar shout not have retained the data, but it doesn’t mean ACC have behaved correctly either.

A full independent inquiry could cover:

  • Consideration of Pullar’s grievances against ACC
  • How the data breach to her occurred, and how it can be prevented in future
  • Pullar’s actions with the data, and what happened at the meetings held with ACC
  • Smith’s interactions with Pullar over her grievances
  • Anything else the QC deems relevant

This may not be an attractive option to the Government. Personally I am of the view that Nick’s ill judgement was motivated by compassion, and there are no malign motivations involved. However others will suggest different motives, and for that reason I don’t think the issue will go away, unless there is a full inquiry, or some other form of accountability.

UPDATE: Cactus Kate has an interesting blog post on the issue. She picked Bronwyn up from the hospital after her accident, so speaks from some first hand knowledge.

The ACC saga

March 20th, 2012 at 2:40 pm by David Farrar

I’d not yet blogged on the ACC saga as there were not enough facts out there to form conclusions on. I also have been wary as I know reasonably well several of the people involved – Bronwyn Pullar, Michelle Boag and Nick Smith.

Like  many in National I knew Bronwyn before her head injury nine years ago. Head injuries can leave people massively affected, and this has been the case for Bronwyn.  My mother practised as a neuropsychologist and was involved in the Head Injury Society, so through her I have gained a reasonable lay understanding of head injuries, and especially how many people never fully recover from them.

It is precisely for injuries like Bronwyn suffered that we have ACC. Now Bronwyn has felt for some years that she had been badly treated by ACC, and also her private insurers off memory. Her battles with them have to some degree become quite consuming for her. I don’t know the details of all the issues, but I will say that from what I do know I think Bronwyn has had some legitimate grievances. That doesn’t mean all the grievances are legitimate – I am not in a position to judge that.

Having set out that background, I do believe Bronwyn made an error of judgement when she was accidentially e-mailed an ACC spreadsheet which included some client details. The correct thing to do would be to immediately notify ACC, and delete the file. It would be fine to perhaps record down a few details from them as proof the data breach occurred, and complain to the Privacy Commissioner. But retaining the data was unwise.

The fact that there is a dispute over who was laying down conditions over its return, reinforces to me that deleting or returning the data was what should have happened.

There has been some focus on the role of Michelle Boag. Yes Michelle is a former National Party President, but that was a decade ago. For much longer than that she has been Bronwyn’s friend. I do not accept that a former party president can not be a support person to someone dealing with a government agency.

It is entirely natural, and in fact advisable, that someone with a head injury has a support person along.

Then we have the letter from Nick Smith, which the Herald has online here. As Nick has now conceded it was an error of judgement. You can quibble over the fact the letter was to independent medical assessors, not ACC. But the reality is Nick should have declined to write the letter at all, just as he had also declined to intervene with ACC. There were many other people who could write a letter about how Bronwyn was before her accident.

Doing the letter on parliamentary letterhead compounded the failure of judgement.

While a failure of judgement, I was pleased to see a journalist tweet that David Shearer had declined to say he thinks the lapse in judgement was serious enough to warrant resignation. It isn’t, and it is good to see Shearer not trying to beat this up, beyond the rightful criticism that is due. If there was some suggestion of self-gain, then it would be a different matter.

The Privacy Commissioner is going to investigate this issue, and she is independent. It remains to be seen how wide her terms of reference will be. I’m not actually against a fuller independent inquiry, because while I do not think anyone has acted with malign motives, the perception is that it is very murky and sunlight is the best disinfectant. However it might be that the Privacy Commissioner inquiry will be wide enough.

Local Govt reform

March 12th, 2012 at 11:00 am by David Farrar

Andrea Vance at Stuff reports:

The Government is set to introduce sweeping reforms to curb local council powers and get soaring debt levels down.

Troubled by escalating rates and in line with National’s public sector reforms, Local Government Minister Nick Smith wants to make elected representatives take more responsibility for wage bills and the generous packages offered to chief executives.

And he will pare back the scope of local government functions so they will only have control of essential local services such as waste, water, roads, libraries and consents.

The reforms will also require authorities to be more “prudent” in event management. It follows David Beckham’s 2009 football game which lost Auckland Regional Council $1.79 million and the saga of the V8 Supercar races which cost Hamilton ratepayers more than $40m.

Dr Smith is concerned that local government debt has burgeoned from $1.5 billion to well over $8b in the past decade. At the same time, rates have climbed 6.85 per cent.

That’s 6.85% a year, which is not only higher than inflation, but higher than both economic and wage growth. Quite simply it is unsustainable.

He believes the blowout stems from 2002 legislation which introduced the “power of general competence”, widening the scope of council responsibilities. Dr Smith said he was “fundamentally re-evaluating that structure”.

“[Councils] can do anything they like. In the Auckland plan, they have set targets for NCEA pass rates by 2020 … nothing to do with the council.

The power of general competence was an expensive mistake. However once granted, it can be very difficult to undo.

Local Government New Zealand president Lawrence Yule said his organisation would work constructively with the minister but councils were “uncomfortable” with some of the proposals.

The sector did not believe debt was a problem, he said.

“The debt servicing costs sits at about 5.8 per cent of the income level of councils. The world best-practice model says it should be under 10 per cent. Most of that debt is in infrastructure. It’s not frilly things, it’s in water systems, wastewater systems and some big roading projects that are going to last 50 years.”

Debt is the appropriate method to fund capital works. But not all of the $8b debt is infrastructure.

I’m also unsure about that 5.8% of income figure. If debt is $8b, then the servicing cost is say 6% so $480m a year. If $480m is 5.8% of revenue, that suggests revenue of $8.3b for local government.  As the Auckland Council has revenues of $1.9b, I doubt total local govt revenue is that high.

Incidentally the Auckland Council has finance costs of $221m on income of $1.87b, which is well over the 10% best-practice figure quoted.

UPDATE: Good to see Hamilton Mayor Julie Hardaker supporting the need for reform, saying:

The Government must give more clarity about what local government should do and, more importantly, should not do. Councils need to be able to explain their decisions for focusing more on the delivery of traditional services and push back on the numerous requests for funding marginal activities.

Hardaker is a first term Mayor whose Council is struggling with the legacy of some white elephant projects approved by previous Councils.

Labour makes it personal

August 18th, 2011 at 6:38 pm by David Farrar

Sarah Young in the Nelson Mail reports:

Labour is recruiting “captains” to “wipe the smug grin” from Nelson MP Nick Smith’s face, but he was not smiling about the ploy today.

Dr Smith says Labour MP Maryan Street’s letter to Labour supporters asking for help with election campaigning is “pretty snide, negative stuff”.

The letter, signed by Labour’s campaign co-ordinator Kate Reilly, calls on people to “make a difference” by becoming a street captain to “motivate and mobilise voters on the day”.

“If we get it right we can be rid of Nick Smith as an electorate MP.

“It’s not complicated but it is important if you want to wipe that smug grin off Nick’s face.”

When I was a campaign manager, I never advocated nastiness towards my candidate’s opponent (Marian Hobbs). To the contrary I made a point of only saying positive things her in a personal, not political, sense.

Most voters don’t like the personal nastiness, and while the stuff about Nick is pretty mild (for Labour) it perhaps helps explain why Street lost the seat by 8,500 votes.

Mallard on Carter

June 17th, 2010 at 11:43 am by David Farrar

Trevor blogged yesterday:

Chris is pretty badly hurt. And he is damaged. That is obvious. He has to decide what he wants to do.

My appeal is for us to be reasonable, forget the lynch mob mentality, and let him work out what is best for him, for Labour and for New Zealand.

And give him space to do that.

Trevor is right. I think people should show the same compassion and reasonableness to Chris Carter, as Trevor himself showed to Nick Smith when Nick got badly hurt and had to take some time off.